Use the Information Below to Answer the Following Question(s)

question 174

Multiple Choice

Use the information below to answer the following question(s) :
Compact Appliances uses a standard part in the manufacture of several of its air conditioners. The cost of producing 40,000 parts is $110,000, which includes fixed costs of $50,000 and variable costs of $60,000. The company can buy the part from an outside supplier for $4.00 per unit, and avoid 40% of the fixed costs.
-If Compact Appliances buys the part, what is the most Compact Appliances can spend per unit so that operating income equals the operating income from making the part?

• A) $1.60
• B) $1.50
• C) $2.00
• D) $3.50

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Definitions:

Soft Music

A genre or style of music characterized by its gentle, soothing, and tranquil qualities, often used for relaxation and stress relief.

Extraverts

Characterized by their energetic, enthusiastic, and sociable behavior, often seeking stimulation and company in their surroundings.

Introverts

Individuals who tend to be more inward-turning, focusing on internal thoughts, feelings, and moods rather than seeking out external stimulation.

Parental Investment

The time, energy, and resources parents allocate to their offspring to ensure their survival and reproductive success.