The Cost to Produce Part a Was $20 Per Unit

question 30

Multiple Choice

The cost to produce Part A was $20 per unit in 2013 and in 2014 it has increased to $22 per unit. In 2014, Supplier ABC has offered to supply Part A for $18 per unit. For the make-or-buy decision ________.

• A) incremental revenues are $4 per unit
• B) incremental costs are $2 per unit
• C) net relevant costs are $2 per unit
• D) differential costs are $4 per unit

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Definitions:

Inborn

Traits, characteristics, or abilities present in an individual from birth, not acquired or developed through experience.

Culture

The entire way of life of a group of people (including both material and symbolic elements) that acts as a lens through which one views the world and that is passed from one generation to the next.

Symbolic Culture

The aspect of culture that consists of the symbols, language, norms, and values that people create and share to communicate and make sense of the world.

Political Party

A structured group of people who share similar political aims and opinions, and aim to influence public policy by getting its candidates elected to public office.