Piper Corp

question 173

Multiple Choice

Piper Corp.is operating at 70% of capacity and is currently purchasing a part used in its manufacturing operations for $24 per unit.The unit cost for the business to make the part is $36,including fixed costs,and $26,not including fixed costs.If 15,000 units of the part are normally purchased during the year but could be manufactured using unused capacity,what would be the amount of differential cost increase or decrease from making the part rather than purchasing it?

• A) $30,000 cost decrease
• B) $180,000 cost increase
• C) $30,000 cost increase
• D) $180,000 cost decrease

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Definitions:

Dominate

To exert control or power over; be in a position of authority or commanding influence.

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A negotiation strategy that involves cooperative efforts to reach a mutually beneficial agreement by addressing the interests and needs of all parties involved.

Motivated

Having a desire or willingness to achieve something, often with enthusiasm or determination.

Trust

The firm belief in the reliability, truth, ability, or strength of someone or something, fundamental for building and maintaining relationships in social and professional contexts.