Rubium Micro Devices Currently Manufactures a Subassembly for Its Main

question 45

Multiple Choice

Rubium Micro Devices currently manufactures a subassembly for its main product.The costs per unit are as follows:

Crayola Technologies Inc.has contacted Rubium with an offer to sell 10,000 of the subassemblies for $138.00 each.Rubium will eliminate $89,000 of fixed overhead if it accepts the proposal.What are the relevant costs for Rubium?

• A)$929,000
• B)$1,029,000
• C)$1,409,000
• D)$1,739,000

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Definitions:

CRA

Stands for the Canada Revenue Agency, which is responsible for administering tax laws for the Canadian government and for various provinces and territories.

Tax Purposes

Pertains to considerations or activities related to the calculation and payment of taxes to regulatory authorities.

Business Purposes

Business purposes refer to the intentions or objectives for which a company or an organization is established and operated, such as profit generation, market expansion, or product development.

Leveraged Lease

A financial lease where the lessor borrows a substantial fraction of the cost of the leased asset.