Use the Following Scenario to Answer the Questions Below

question 53

Multiple Choice

Use the following scenario to answer the questions below.
You currently make a part on old equipment at a cost of $50,000 per year and a variable cost of $20 / unit.You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year.The following table summarizes the details of this make versus buy decision.

-Refer to the instruction above.What does the company save for the year by selecting the low-cost option at an annual requirement of 40,000 units?

• A)$150,000
• B)$300,000
• C)$50,000
• D)$40,000

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Definitions:

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A measure of class standing, typically indicated by income, occupational prestige, and educational attainment.

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A term used to describe Americans of Asian descent, representing a diverse group of peoples from East Asia, Southeast Asia, and the Indian subcontinent.

Stereotype

A widely held but oversimplified and generalized belief about a particular group of people or type of person.