Demron Is in Serious Negotiations to Purchase a Welding Machine

question 62

Multiple Choice

Demron is in serious negotiations to purchase a welding machine that will enable them to perform their own welding. They currently have their welding outsourced at a cost of $1.50 per weld and a fixed cost of $45,000. Their marketing team feels that they can sustain an annual sales volume sufficient to require 35,000 welds. If a fancy new welding rig costs $13,500 what is the maximum variable cost per weld that Demron should be willing to pay in order to bring this process in-house?

• A) $3.00 per weld
• B) $2.40 per weld
• C) $2.00 per weld
• D) $1.45 per weld

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Definitions:

Mentoring

A professional relationship in which an experienced person (the mentor) provides guidance, advice, and support to a less experienced person (the mentee).

Debriefing

A process of receiving an explanation and targeted feedback regarding a completed task or performance.

Exerting Authority

The act of applying one's power or control over others in a formal or informal setting to enforce rules or decisions.

Well-Liked Leader

A leader who is respected and admired by their peers and subordinates, often due to their ability to inspire, listen, and empathize.