Noel Stewart Bought a Machine Two Years Ago for £500

question 63

Multiple Choice

Noel Stewart bought a machine two years ago for £500. He must now replace the old machine by buying a new model 206 for £700 or a used model 204 for £650. Noel has decided to buy model 204.
Noel Stewart has estimated that the total fixed costs for his department are £10,000. He also estimated that his variable cost per unit is £10.
Noel Stewart bought some materials 2 years ago for £300. These materials have simply been left in stock as they were not needed. A new customer offers to buy a product that uses these materials. The conversion cost is £500 and the customer has offered to pay £650 for the product. Noel decides to accept the order.
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If Noel produced 10,000 units his fixed cost per unit would be:

• A)£1.
• B)£100.
• C)£1,000.
• D)£0.

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Definitions:

Entorhinal Cortex

Cortex located on the medial temporal lobe surface; provides a major route for neocortical input to the hippocampal formation; often degenerates in Alzheimer disease.

Perirhinal Cortex

Cortex lying next to the rhinal fissure on the ventral surface of the brain.

Alzheimer Disease

A progressive neurodegenerative disorder characterized by memory loss, cognitive decline, and personality changes due to brain cell death and dysfunction.

Genetic Defects

Abnormalities in the genome that result in the malfunctioning of genes, often leading to disease or disorders.