Valuable Electronics Uses a Standard Part in the Manufacture of Different

question 128

Multiple Choice

Valuable Electronics uses a standard part in the manufacture of different types of radios.The total cost of producing 29,000 parts is $105,000,which includes fixed costs of $50,000 and variable costs of $55,000.The company can buy the part from an outside supplier for $2 per unit and avoid 30% of the fixed costs.Assume that the company can use the freed manufacturing space to make another product that can earn a profit of $16,000.If Valuable outsources,what will be the effect on operating income?

• A) increase of $28,000
• B) decrease of $28,000
• C) decrease of $15,000
• D) increase of $16,000

Calculate the contribution margin per unit.

Understand the classification and calculation of conversion and product costs.

Understand the stages and tasks associated with career development according to Super's theory.

Comprehend how personality and self-concept play a role in vocational choices.

---

Definitions:

Steel

A hard, strong alloy of iron with carbon and usually other elements, used extensively as a structural and fabricating material.

Utility

A measure of satisfaction, usefulness, or value derived from consuming goods and services.

Pleasure

A sense of joy, pleasure, or fulfillment that comes from participating in or experiencing an activity.

Satisfaction

The feeling of pleasure or contentment when needs, expectations, or desires are fulfilled.