Answer the Following Questions Using the Information Below

question 76

Multiple Choice

Answer the following questions using the information below:
Stephans Corporation currently manufactures a subassembly for its main product. The costs per unit are as follows:
Bill Company has contacted Stephans with an offer to sell them 5,000 of the subassemblies for $22.00 each. Stephans will eliminate $25,000 of fixed overhead if it accepts the proposal.
-What are the relevant costs for Stephans?

• A)$140,000
• B)$125,000
• C)$105,000
• D)$80,000

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Definitions:

Real GDP

Gross Domestic Product adjusted for inflation, providing a more accurate picture of an economy's size and how it's growing over time.

National Income

The total income earned by a country's residents and businesses, including wages, rent, interest, and profits.

Government Purchases

Expenditures made by local, state, or federal government sectors on goods and services that directly absorb resources.

Net Exports

The difference between a country's total exports of goods and services and its total imports of goods and services; net exports can be a positive or negative value.