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

question 163

Multiple Choice

Use the information below to answer the following question(s) :
Star Appliance manufactures a variety of appliances which all use Part 92F. Currently, Star Appliance manufactures Part 92F itself. It has been producing 8,000 units of Part 92F annually. The annual costs of producing Part 92F at the level of 8,000 units include:

All of the fixed manufacturing overhead costs would continue whether Part 92F is made internally or purchased from an outside supplier. Star Appliance has no alternative use for the manufacturing facilities.
-Roger Parts Company has offered to sell 8,000 units of Part 92F to Star Appliance for $22.00 per unit. What is the highest price per unit that Star Appliance should be willing to pay for the part?

• A) $6
• B) $21
• C) $12
• D) $18

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Definitions:

Telephone

A communication device that allows users to conduct voice conversations across distances by converting sound into electronic signals.

Prospect

A potential customer or client who has been identified as fitting the target market of a business.

Networking

The activity of connecting with people for the purpose of exchanging information and growing professional or social relationships.

Face-to-Face Meeting

A direct interaction between two or more people in the same physical location, often for discussion or consultation.