Benton Company Manufactures a Part for Its Production Cycle The Fixed Factory Overhead Costs Are Unavoidable

question 129

Multiple Choice

Benton Company manufactures a part for its production cycle.The costs per unit for 38,000 units of the part are as follows:
$\begin{array}{ll}&\text { Per Unit }\\\text { Direct materials } & \$ 3.00 \\\text { Direct labor } & 5.00 \\\text { Variable factory overhead } & 3.00 \\\text { Fixed factory overhead } & \underline{4.00} \\\text { Total costs } & \$ 15.00\end{array}$
The fixed factory overhead costs are unavoidable.Assume no other use for the facilities.What is the highest price Benton Company should pay for the part from an outside supplier?

• A) $8
• B) $11
• C) $12
• D) $15

---

Definitions:

Discrepancies

inconsistencies or differences that often require further investigation or clarification.

Surveyors

Professionals who measure and map land features, properties, and boundaries, often for construction and land development purposes.

Himalaya

A major mountain range in Asia, forming a barrier between the Tibetan Plateau to the north and the alluvial plains of the Indian subcontinent to the south.

Isotopic Ages

The determination of the age of rocks, minerals, and meteorites based on the rate of decay of radioactive isotopes contained within them.