McGraw Inc

question 102

Multiple Choice

McGraw Inc.manufactures 12,000 units of a part used in its production to manufacture guitars.The annual production activities related to this part are as follows: Hill Inc.has offered to sell 12,000 units of the same part to McGraw for $22 per unit.If McGraw were to accept the offer,some of the facilities presently used to manufacture the part could be rented to a third party at an annual rental of $18,000.Moreover,$4 per unit of the fixed overhead applied to the part would be totally eliminated.
-What should McGraw's decision be,and what is the total cost savings that would result?

• A)Make,$60,000
• B)Buy,$60,000
• C)Make,$78,000
• D)Buy,$78,000

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Definitions:

Nodes

Points or regions in an atom or molecule where the electron density is zero, typically found in orbital diagrams.

1,3,5-hexatriene

An unsaturated hydrocarbon with the formula C6H8 featuring conjugated double bonds, used as a model compound in studying conjugation and electronic effects.

UV Spectroscopy

A type of spectroscopy that measures the absorption of ultraviolet light by a chemical substance to determine its characteristics or concentration.

Electron

An electron is a subatomic particle with a negative electric charge, which orbits the nucleus of an atom and is essential in electricity, magnetism, and chemical bonding.