Fastec Automobile Company Fabricates Automobiles A Korean Factory Has Offered to Supply Fastec with Ready-Made

question 126

Multiple Choice

Fastec Automobile Company fabricates automobiles. Each vehicle includes one transfer case, which is currently made in-house. Details of the transfer case fabrication are as follows: $$\begin{array} { | l | r | l | } \hline \text { Volume } & 900 & \text { units per month } \\\hline \text { Variable cost per unit } & \$ 6 & \text { per unit } \\\hline \text { Fixed costs } & \$ 16,000& \text { per month } \\\hline\end{array}$$ A Korean factory has offered to supply Fastec with ready-made units for a price of $13 per transfer case. Assume that Fastec's fixed costs are unavoidable, but that Fastec could use the vacated production facilities to earn an additional $9500 of profit per month. If Fastec decides to outsource, monthly operating income will ________.

• A) increase by $3200
• B) decrease by $16,000
• C) increase by $9500
• D) decrease by $26,600

Distinguish between different human compromises such as rationalization and stereotyping.

Appreciate the significance of identifying problems accurately before seeking solutions.

Understand the need for gathering and organizing facts as a preliminary step in decision making.

Learn how personal perspectives and simplicity can compromise decision quality.

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Definitions:

ADHD

Attention-Deficit/Hyperactivity Disorder, a neurodevelopmental disorder characterized by inattention, hyperactivity, and impulsivity.

Diagnosed Ages

The specific ages or time periods in an individual's life when they are officially identified with a particular condition or illness by a healthcare professional.

Insomnia Disorder

Insomnia Disorder is a clinical condition characterized by difficulty falling asleep, staying asleep, or obtaining restorative sleep, leading to significant distress or impairment.

Trouble Falling Asleep

Difficulties in initiating sleep, which can lead to reduced sleep quality and duration, affecting overall health.