Answer the Following Question(s) Using the Information Below

question 11

Multiple Choice

Answer the following question(s) using the information below.
Day Star collected the following information:
Day Star can sell 25,000 units per year, at $80 each. The company also has an offer from a subsidiary to rent its plant facilities for $2,000,000. The fixed overhead will be incurred in each alternative, but there will be a savings of $150,000 in the fixed costs under the renting alternative.
-Audio Labs collected the following information on the cost of producing 20,000 speaker units: Cartunes has offered to sell Audio 10,000 speakers for $56.00 each.
Should Audio Labs make or buy the parts if the facilities remain idle when speakers are purchased?

• A) buy, save $16.00 per unit
• B) buy, save $4.00 per unit
• C) make, save $2.00 per unit
• D) make, save $4.00 per unit
• E) make, save $6.00 per unit

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Definitions:

Independent Variables

Factors in an experiment that are intentionally manipulated to observe their effect on dependent variables.

Dependent Variables

Variables in an experiment that are expected to change as a result of manipulations in the independent variables.

Confounding Variables

Factors other than the independent variable that may cause a change in the dependent variable, potentially skewing results in an experiment.

Control Groups

In experiments, the groups that do not receive the experimental treatment and are used as a baseline to compare the effects of the treatment.