Bannister Co. is thinking about having one of its products manufactured by a subcontractor. Currently, the cost of manufacturing 1,000 units is: Direct material$45,000 Direct labor 30,000 Factory overhead (30% is variable) 98,000 If Bannister can buy 1,000 units from an outside supplier for $100,000, it should:
A. Make the product because factory overhead is a sunk cost.
B. Buy the product because the total incremental costs of manufacturing are greater than $100,000.
C. Buy the product because total fixed and variable manufacturing costs are greater than $100,000.
D. Make the product because current factory overhead is less than $100,000.
E. Make the product because the cost of direct material plus direct labor of manufacturing is less than $100,000.
Answer: B
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Which of the following equations is true of aggregate demand?
A. Aggregate demand = consumption + investment - government spending - net exports B. Aggregate demand = consumption - investment - government spending - net exports C. Aggregate demand = consumption + investment + government spending + net exports D. Aggregate demand = consumption - investment + government spending + net exports
Use the following letters to represent items: P = Purchases (net) C = Cost of goods sold B = Beginning inventory E = Ending inventory Which equation is correct?
A) B ? C + P = E B) B ? E = C + P C) P ? E = B + C D) B = C ? E + P
Which of the following is not a key dimension of financialization?
A. public sector budget austerity B. private equity C. share price maximization D. profits via the global sale of goods and services
Shane's Auto Parts orders twenty tires from Tough Tires, Inc The truck delivering the tires to Shane's is in an accident and ten of the tires are damaged. Shane's Auto Parts? A)?cannot reject the entire shipment
B)?must still pay for all twenty tires at the original contract price. C)?may inspect the tires and accept the shipment with a reduction in price. D)?must reject the entire shipment.