Answer the Following Question(s)using the Information Below

question 166

Multiple Choice

Answer the following question(s) using the information below.Mable's Engine Company manufactures part Z92 used in several of its engine models.Monthly production costs for 1,000 units are as follows:
Mable's Engine Company has the option of purchasing the part from an outside supplier at $61 per unit.It is estimated that all of the fixed overhead costs assigned to Z92 will remain if the company purchases Z92 from the outside supplier.
-Unit cost data can mislead decisions by including irrelevant costs or by

• A)not computing fixed overhead costs.
• B)computing labour and materials costs only.
• C)computing administrative costs.
• D)not computing unit costs at the relevant output level.
• E)including qualitative data.

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Definitions:

Leakages

In the context of economics, refers to any portion of income that is not used for domestic spending, such as savings, taxes, or imports.

Injections

In the context of an economy, Injections refer to the introduction of income into the circular flow of money, such as investments, government spending, and exports.

Circular Flow Model

An economic model illustrating the continuous flow of money, resources, and goods among households and businesses in an economy.

Value Added

The increase in worth of a product or service as a result of a particular process, typically measured as the difference between the market price and the production cost.