A Supplier Offers to Make Part a for $70

question 96

Multiple Choice

A supplier offers to make Part A for $70.Jansen Company has relevant costs of $80 a unit to manufacture Part A.If there is excess capacity,the opportunity cost of buying Part A from the supplier is:

• A)$10 000.
• B)$70 000.
• C)0.
• D)indeterminable.

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Definitions:

Federal Laws

Laws enacted by the national government that apply throughout the country.

Intermediate Scrutiny

A standard of review under which a law must be necessary to achieve a substantial, or important, government interest and must be narrowly tailored to that interest.

Gender-based Classification

the categorization or differentiation of individuals based on their gender, which can raise legal issues particularly when it leads to discrimination.

Rational Basis

A standard of judicial review that requires a law to have a reasonable connection to a legitimate government objective to be upheld as constitutional.