Factor Co Can Produce a Unit of Product for the Following

question 145

Multiple Choice

Factor Co. can produce a unit of product for the following costs: An outside supplier offers to provide Factor with all the units it needs at $46 per unit. If Factor buys from the supplier, the company will still incur 60% of its overhead. Factor should choose to:

• A) Buy since the relevant cost to make it is $56.
• B) Make since the relevant cost to make it is $48.
• C) Buy since the relevant cost to make it is $48.
• D) Make since the relevant cost to make it is $32.
• E) Buy since the relevant cost to make it is $32.

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Definitions:

Feudalism

A socio-economic system in medieval Europe where land was held by nobles in exchange for military service, and vassals were tenants of the nobles, while serfs worked the land.

Patrimonialism

A form of governance or organization where all power is held by a single ruler or authority, often based on traditional or familial ties.

Gerontocracy

A form of social structure where the power is heavily concentrated in the hands of older members of society, often marginalizing younger generations.

Contractual Relationships

Contractual Relationships refer to a legally binding agreement between two or more parties, typically involving the exchange of goods, services, money, or promises.