Xon Company Needs 1,000 Components for One of Its Products

question 53

Multiple Choice

Xon Company needs 1,000 components for one of its products. It can subcontract production of the components to the Eon Company for $40 each. The business can produce the components internally for a total variable cost of $30 per component. Xon Company has spare capacity. What will be the impact on Xon's profit if Eon's offer is accepted?

• A)$10,000 decrease.
• B)$10,000 increase.
• C)$1,000 increase.
• D)$1,000 decrease.

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Definitions:

Doppler Ultrasound Stethoscope

An instrument that combines ultrasound technology with a stethoscope to measure and listen to blood flow in arteries and veins.

Absent Pulse

A condition where no heartbeat is felt on palpation at a specific site, indicating a potential emergency or cardiac arrest.

Tympanic Temperature

Body temperature measured with a thermometer inserted into the ear canal, reflecting the internal body temperature.

Pinna

The visible part of the outer ear that captures sound waves and directs them into the ear canal.