A US Motorcycle Manufacturer Has the Option of Either Making the the Gas

question 44

Multiple Choice

A U.S. motorcycle manufacturer has the option of either making the gas tank in their newly designed motorcycle, or subcontracting it to a manufacturer from Sinagpore. The manufacturer expects to produce 1,000 units per year. Costs for the two options are:
$\begin{array}{|l|c|c|}\hline \text { Source } & \text { Fixed Cost } & \text { Variable Cost } \\\hline \text { Make in-house } & \$ 15,000 & \$ 21.50 \\\hline \text { Buy from Singapore } & \$ 0 & \$ 29.00 \\\hline\end{array}$
-The annual cost to outsource the manufacturing to Singapore is _____.

• A) less than or equal to $30,000
• B) more than $30,000 but less than or equal to $40,000
• C) more than $40,000 but less than or equal to $50,000
• D) more than $50,000 but less than or equal to $60,000

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Definitions:

Charles Handy

A respected British management thinker known for his theories on organizational culture and motivation.

Common Purpose

A shared vision or goal that unites members of a group, team, or community, driving collaborative efforts towards achieving that goal.

Organization

A systematic arrangement of people and resources working together to achieve specific goals.

Collection of People

An assembly or group of individuals brought together for a common purpose or function.