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:

Media Richness

A theory that evaluates the ability of information transmission through a particular communication medium based on the immediacy of feedback, cues, variety of language, and personal focus it can handle.

Video Conference

A technology-driven meeting format where participants can see and hear each other via video and audio links, enabling remote communication.

Communication Channels

The various methods or mediums through which messages are conveyed from a sender to a receiver, including verbal, non-verbal, and digital pathways.

Serifs

Small decorative strokes added at the end of the main strokes of a character in some fonts.