Sarah's Talking Dolls Manufactures a Computer Chip Used in the Production

question 82

Essay

Sarah's Talking Dolls manufactures a computer chip used in the production of dolls for children. When 5,000 dolls are produced, the costs per part are:

Sam's Associates has offered to sell Sarah's Talking Dolls 5,000 parts for $5.75 each. If Sarah accepts the offer, fixed manufacturing costs will decrease by $1.00 per unit.
A) What is the relevant per unit cost to manufacture the part?
B) Which alternative is best for Sarah's Talking Dolls and by how much?

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Definitions:

Unconditional Positive Regard

A concept in client-centered therapy stating that therapists should offer a constant acceptance and support for their clients regardless of what they say or do.

Directive Approach

A style of therapy or counseling where the therapist provides strong guidance and advice to the client.

Empathize

The ability to understand and share the feelings of another, putting oneself in someone else’s shoes emotionally.

Systematic Desensitization

A behavioral therapy technique used to reduce phobic reactions and anxiety through gradual exposure to the feared object or situation.