Iwasaki Inc

question 11

Multiple Choice

Iwasaki Inc.is considering whether to continue to make a component or to buy it from an outside supplier.The company uses 13,000 of the components each year.The unit product cost of the component according to the company's cost accounting system is given as follows: Assume that direct labor is a variable cost.Of the fixed manufacturing overhead,30% is avoidable if the component were bought from the outside supplier.In addition,making the component uses 1 minute on the machine that is the company's current constraint.If the component were bought,this machine time would be freed up for use on another product that requires 2 minutes on this machine and that has a contribution margin of $5.20 per unit. When deciding whether to make or buy the component,what cost of making the component should be compared to the price of buying the component?

• A)$22.40
• B)$19.80
• C)$17.28
• D)$19.88

Understand the concept of the aggregate demand curve and its downward slope due to various effects.

Understand the concept and impact of the hedonic treadmill on individuals' happiness levels.

Grasp the importance of positive psychology and practices that increase happiness.

Identify the role of emotions and emotional expressions in individual well-being.

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Definitions:

Demand Curves

Graphical representations of the relationship between the price of a good and the quantity demanded by consumers at various prices.

Elastic

Describes a situation where the quantity demanded or supplied changes significantly when the price changes.

Marginal Revenue

The additional income received from selling one more unit of a good or service.

Marginal Cost

The additional cost incurred from producing one more unit of a good or service.