Anderson Co If Anderson Accepts the Order,$8 of Fixed Overhead Per Unit

question 83

Multiple Choice

Anderson Co.makes and uses 5,000 components each year in its manufacturing operations.An outside supplier has offered to supply the components to Anderson at $66 per unit.Anderson's production costs are as follows: $\begin{array}{ll}\text { Direct materials } & \$ 8 \\\text { Direct labor } & 32 \\\text { Variable overhead } & 12 \\\text { Fixed overhead (based on normal capacity) } & 34\end{array}$
If Anderson accepts the order,$8 of fixed overhead per unit will be eliminated.
What is the relevant cost to produce one unit?

• A) $86
• B) $52
• C) $78
• D) $60

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Definitions:

Inferiority Complex

Feelings of inferiority hypothesized by Adler to serve as a central motivating force.

Psychodynamic Perspective

A theoretical framework in psychology that emphasizes the role of unconscious processes and childhood experiences in shaping behavior and personality.

Aggression

Behaviors or actions carried out with the intent to harm someone either physically or psychologically, often manifested as a response to frustration or threat.

Unconscious

A part of the mind that is inaccessible to the conscious mind but that affects behavior and emotions.