Growe Company Manufactures Sewing Machines and Requires 30,000 Units of a Component

question 30

Multiple Choice

Growe Company manufactures sewing machines and requires 30,000 units of a component that is used in the manufacturing process. If Growe buys the part from Zigler Brothers the plant will be idle. Of the fixed, 55% overhead will continue regardless of the decision. The cost to buy the part from Zigler is $46. The unit cost to make the part is: Direct materials $12
Direct labour 20
Variable overhead 12
Average fixed overhead 10
Total $54
Which alternative is more profitable and by what amount?

• A)Buy, $150,000
• B)Make, $150,000
• C)Buy, $75,000
• D)Make, $75,000

Understand how artists use their chosen mediums to address societal issues such as gender and racism.

Recognize the impact of globalization on the breaking down of national stylistic boundaries within contemporary art forms.

Identify Deconstructivist architectural theories and their expression in specific structures.

Analyze the thematic elements and symbolism in contemporary artworks and their allusions to historical or social contexts.

---

Definitions:

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, due to the scale of operation increasing.

Opportunity Cost

The abandonment of potential improvements from other possibilities once one choice is made.

Absolute Advantage

A country's ability to produce a good more efficiently than other countries, requiring fewer resources for the same output.

Autarky

National self-sufficiency; no economic interaction with foreigners.