San Antonio Corporation Manufacturers a Part for Its Production Cycle

question 2

Multiple Choice

San Antonio Corporation manufacturers a part for its production cycle. The costs per unit for 5,000 units of this part are as follows: Amarillo Company has offered to sell San Antonio Corporation 5,000 units of the part for $112 per unit. If San Antonio Corporation accepts Amarillo Company's offer, total fixed costs will be reduced to $60,000. What alternative is more desirable and by what amount is it more desirable?

• A) Buy $100,000
• B) Buy $40,000
• C) Make $20,000
• D) Make $120,000

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Definitions:

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A psychological theory suggesting that the occurrence of aggressive behavior is caused by frustration.

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A set of related televised programs, usually with a continuous storyline or thematic consistency, broadcasted over multiple episodes.

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A psychological theory that proposes the human mind perceives objects as wholes before recognizing their individual parts.

Wertheimer

A psychologist and one of the founders of Gestalt psychology, known for his work on perception and problem-solving.