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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Definitions:

Equilibrium

A state where supply and demand are balanced, leading to a stable market condition.

Export

The selling of goods or services produced in one country to buyers in another country.

Import

The process of bringing goods or services into one country from another for the purpose of selling.

Domestic Price

The price at which goods or services are sold within a country's borders, unaffected by import or export tariffs.