Use the Information Below to Answer the Following Question(s)

question 174

Multiple Choice

Use the information below to answer the following question(s) :
Compact Appliances uses a standard part in the manufacture of several of its air conditioners. The cost of producing 40,000 parts is $110,000, which includes fixed costs of $50,000 and variable costs of $60,000. The company can buy the part from an outside supplier for $4.00 per unit, and avoid 40% of the fixed costs.
-If Compact Appliances buys the part, what is the most Compact Appliances can spend per unit so that operating income equals the operating income from making the part?

• A) $1.60
• B) $1.50
• C) $2.00
• D) $3.50

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Definitions:

Placebos

Inactive substances or treatments used in controlled experiments to test the efficacy of therapeutic interventions, serving as a control group to the active treatments.

Headache Monitoring

The systematic tracking of headache occurrence, intensity, and duration to aid in diagnosis and treatment planning.

Relaxation Therapies

Techniques or practices designed to reduce stress and anxiety, thereby promoting physical and mental well-being; examples include meditation, deep-breathing exercises, and progressive muscle relaxation.

Meta-analysis

A rigorous and systematic method of synthesizing research findings from various studies on a particular topic to achieve a comprehensive understanding.