A Company Is Investigating Two Automated Approaches for Its Production

question 61

Multiple Choice

A company is investigating two automated approaches for its production process. It has collected the following cost information about each:
$\begin{array}{|l|c|c|}\hline \text { Alternative } & \text { Fixed Cost } & \text { Variable Cost } \\\hline \text { CNC } & \$ 80,000 & \$ 2.75 \\\hline \text { FMS } & \$ 190,000 & \$ 1.25 \\\hline\end{array}$
-If the forecast annual production volume is 50,000 units, which technology alternative should the company choose?

• A) CNC
• B) FMS

---

Definitions:

Electronic Agents

Computer systems or software programmed to autonomously perform tasks on behalf of users, such as processing information or executing transactions.

Legitimizes

To make something legal, valid, or acceptable according to law or social norms.

Agency Coupled With An Interest

An irrevocable agency agreement in which the agent is given an interest in the subject matter of the agency. Also called irrevocable agency.

Principal

The original sum of money borrowed in a loan, or the amount of the investment, not including the interest or profits.