Yankton Industries Manufactures 20,000 Components Per Year

question 47

Multiple Choice

Yankton Industries manufactures 20,000 components per year. The manufacturing cost of the components was determined as follows: If the component is not produced by Yankton, inspection of products and provision of power costs will only be 10 percent of the production costs; moving materials costs and setting up equipment costs will only be 50 percent of the production costs; and supervision costs will amount to only 40 percent of the production amount. An outside supplier has offered to sell the component for $23.50.
What is the effect on income if Yankton Industries purchases the component from the outside supplier?

• A) $25,000 increase
• B) $45,000 increase
• C) $80,000 decrease
• D) $80,000 increase

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Definitions:

Mentoring

is a developmental partnership where a more experienced or knowledgeable person helps to guide a less experienced or knowledgeable person.

Protégés

Individuals who are guided and supported by more experienced or influential mentors in their personal or professional development.

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A developmental process where an experienced individual, known as a coach, supports a learner or client in achieving specific personal or professional goals.

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A regular review and evaluation of an employee's job performance and overall contribution to an organization.