Answer the Following Questions Using the Information Below:
Rubium Micro

question 165

Multiple Choice

Answer the following questions using the information below:
Rubium Micro Devices currently manufactures a subassembly for its main product. The costs per unit are as follows:
$\begin{array}{lr}\text { Direct materials } & \$ 45.00 \\\text { Direct labor } & 35.00 \\\text { Variable overhead } & 33.00 \\\text { Fixed overhead } & 30.00\\\text { Total }&\$143.00\end{array}$ Crayola Technologies Inc. has contacted Rubium with an offer to sell 5,000 of the subassemblies for $135.00 each. Rubium will eliminate $85,000 of fixed overhead if it accepts the proposal.
-Should Rubium make or buy the subassemblies? What is the difference between the two alternatives?

• A) Buy; savings = $85,000
• B) Buy; savings = $50,000
• C) Make; savings = $25,000
• D) Make; savings = $120,000

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Definitions:

Salesperson's Monthly Quota

The set sales target that a salesperson is expected to achieve within a month.

Integrity

The quality of being honest and having strong moral principles, including the consistency of actions, values, methods, measures, principles, expectations, and outcomes.

Disclose

To reveal or make known information, especially that which was previously secret or confidential.

Defect

A shortcoming, fault, or imperfection in a product or service that fails to meet quality standards.