Answer the Following Questions Using the Information Below:
Genent's Preserves

question 123

Multiple Choice

Answer the following questions using the information below:
Genent's Preserves currently makes jams and jellies and a variety of decorative jars used for packaging. An outside supplier has offered to supply all of the needed decorative jars. For this make-or-buy decision, a cost analysis revealed the following avoidable unit costs for the decorative jars:
$$\begin{array} { l r } \text { Direct materials } & \$ 0.50 \\\text { Direct labor } & 0.06 \\\text { Unit-related support costs } & 0.20 \\\text { Batch-related support costs } & 0.24 \\\text { Product-sustaining support costs } & 0.44 \\\text { Facility-sustaining support costs } & 0.56 \\\quad \text { Total cost per jar } & \$ 2.00\end{array}$$
-The maximum price that Genent's Preserves should be willing to pay for the decorative jars is ________.

• A) $0.56 per jar
• B) $0.76 per jar
• C) $0.44 per jar
• D) $2.00 per jar

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