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

question 36

Multiple Choice

Use the information below to answer the following question(s) :
Cruise Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part, assuming a production level of 6,000 units, are as follows:

-Assuming no other use for its facilities, what is the highest price per unit that Cruise Company should pay for the part?

• A) $12
• B) $11
• C) $8
• D) $5

---

Definitions:

Depreciation Estimates

Projections made about the reduction in value of a tangible asset over its useful life for accounting and tax purposes.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the consumption of the asset's value over time.

Depreciation Estimates

Projections or calculations made regarding the decrease in value of tangible assets over time due to use, wear, or obsolescence.

Depreciation Method

A systematic approach to allocating the cost of a tangible asset over its useful life.