Jensen Company Has Relevant Costs of $80 Per Unit to Manufacture

question 36

Multiple Choice

Jensen Company has relevant costs of $80 per unit to manufacture Part A.A current supplier offers to make Part A for $70 per unit.If capacity is constrained,the opportunity cost of buying Part A from the supplier is:

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

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Definitions:

Pay Policy Line

A graphed line showing the mathematical relationship between job evaluation points and pay rate.

Regression Analysis

A statistical method used for estimating the relationships among variables, particularly for analyzing the impact of one or more independent variables on a dependent variable.

Market-Pay-Rate Data

Information regarding the average compensation paid for a specific job or skill in the labor market, used by organizations to ensure competitive and fair wage practices.

Compa-Ratio

A metric comparing an individual's salary to the average for their job or level within the organization, indicating relative pay position.