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Concierge Industries Manufactures 40,000 Components Per Year

question 98

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Concierge Industries manufactures 40,000 components per year. The manufacturing cost of the components was determined as follows: Concierge Industries manufactures 40,000 components per year. The manufacturing cost of the components was determined as follows:   An outside supplier has offered to sell the component for $12.75. Concierge Industries can rent its unused manufacturing facilities for $45,000 if it purchases the component from the outside supplier. What is the effect on income if Concierge purchases the component from the outside supplier? A)  $195,000 increase B)  $165,000 decrease C)  $225,000 decrease D)  $135,000 increase An outside supplier has offered to sell the component for $12.75.
Concierge Industries can rent its unused manufacturing facilities for $45,000 if it purchases the component from the outside supplier.
What is the effect on income if Concierge purchases the component from the outside supplier?


Definitions:

LeClanché Cell

An early type of wet cell battery consisting of a zinc anode, a manganese dioxide cathode, and an electrolyte of ammonium chloride.

Carbon-Zinc

A type of battery chemistry characterized by the use of carbon and zinc as the electrode materials, often used in household batteries.

Alkaline

A type of battery chemistry that is based on the reaction between zinc and manganese dioxide, characterized by high energy density.

Hydrometer

A device used to measure the specific gravity of a fluid, such as the electrolyte used in a battery.

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