Super Security Company Manufacturers Home Alarms

question 8

Multiple Choice

Super Security Company manufacturers home alarms. Currently it is manufacturing one of its components at a variable cost of $45 and fixed costs of $15 per unit. An outside provider of this component has offered to sell Safe Security the component for $50. Determine the best plan and calculate the savings.

• A) $5 savings per unit - Manufacture
• B) $5 savings per unit - Purchase
• C) $10 savings per unit - Manufacture
• D) $15 savings per unit - Purchase

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