A Supplier Offers to Make Part a for $35

question 6

Multiple Choice

A supplier offers to make Part A for $35. Altec Company has relevant costs of $40 a unit to manufacture 1,000 units of Part A. If there is excess capacity, the opportunity cost of buying Part A from the supplier is:

• A)0
• B)$40,000
• C)$35,000
• D)indeterminable

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