Rubium Micro Devices Currently Manufactures a Subassembly for Its Main

question 175

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 6,000 of the subassemblies for $144.00 each.Rubium will eliminate $89,000 of fixed overhead if it accepts the proposal.Should Rubium make or buy the subassemblies? What is the difference between the two alternatives?

• A)Buy;savings = $89,000
• B)Buy;savings = $7,000
• C)Make;savings = $1,000
• D)Make;savings = $203,000

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