Answer the Following Questions Using the Information Below:
Piels Corporation

question 98

Multiple Choice

Answer the following questions using the information below:
Piels Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows:
$\begin{array}{lr}\text { Direct materials } & \$ 90,000 \\\text { Direct labor } & 130,000 \\\text { Variable factory overhead } & 60,000 \\\text { Fixed factory overhead } & 140,000 \\\quad \text { Total costs } & \$ 420,000\end{array}$ Of the fixed factory overhead costs, $60,000 is avoidable.
-Conners Company has offered to sell 10,000 units of the same part to Piels Corporation for $36 per unit.Assuming there is no other use for the facilities,Schmidt should ________.

• A) make the part, as this would save $6 per unit
• B) buy the part, as this would save $6 per unit
• C) buy the part, as this would save the company $60,000
• D) make the part, as this would save $2 per unit

Understand the importance and method of ranking choices based on risk and expected returns.

Comprehend the application of standard deviation in comparing economic choices.

Grasp how probabilities influence the outcomes of economic decisions.

Understand the mechanisms through which different types of muscle tissue (skeletal, smooth, and cardiac) can initiate contractions.

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Definitions:

Subsequent Client Interview

An interview conducted with a client following a previous meeting or interaction, aimed at gathering additional information or clarifying details.

Impeaching

The process of questioning the credibility or integrity of a witness, evidence, or public official, often in a legal or legislative context.

Unreliable

Lacking consistency or trustworthiness in accuracy, performance, or character.

Witness Statement

A document containing the narrative of a witness's observation or experience relevant to a legal case.