Value Electronics Uses a Standard Part in the Manufacture of Different

question 151

Multiple Choice

Value Electronics uses a standard part in the manufacture of different types of radios.The total cost of producing 24,000 parts is $90,000,which includes fixed costs of $30,000 and variable costs of $60,000.The company can buy this part from an external supplier for $5 per unit and avoid 10% of the fixed costs.If Value Electronics decides to outsource the production of the part,how will it impact its operating income?

• A) Operating income increases by $57,000.
• B) Operating income decreases by $57,000.
• C) Operating income increases by $60,000.
• D) Operating income decreases by $60,000.

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Definitions:

Longitudinal Research

An observational research method in which data is gathered for the same subjects repeatedly over a period of time, which can extend over years or even decades.

Levels Of Intelligence

Refers to the different ways of categorizing human cognitive ability, often assessed through various types of IQ tests or other measures of cognitive function.

Mean

The average of a set of numbers, calculated by adding all the numbers together and dividing by the count of the numbers.

Sample Data

A subset of data selected from a larger population, used for statistical analysis.