Answer the following question(s) using the information below.
Day Star collected the following information:
Day Star can sell 25,000 units per year, at $80 each. The company also has an offer from a subsidiary to rent its plant facilities for $2,000,000. The fixed overhead will be incurred in each alternative, but there will be a savings of $150,000 in the fixed costs under the renting alternative.
-Audio Labs collected the following information on the cost of producing 20,000 speaker units: Cartunes has offered to sell Audio 10,000 speakers for $56.00 each.
Should Audio Labs make or buy the parts if the facilities remain idle when speakers are purchased?
A) buy, save $16.00 per unit
B) buy, save $4.00 per unit
C) make, save $2.00 per unit
D) make, save $4.00 per unit
E) make, save $6.00 per unit

Question

Answer the following question(s) using the information below.
Day Star collected the following information:
  Day Star can sell 25,000 units per year, at $80 each. The company also has an offer from a subsidiary to rent its plant facilities for $2,000,000. The fixed overhead will be incurred in each alternative, but there will be a savings of $150,000 in the fixed costs under the renting alternative.
-Audio Labs collected the following information on the cost of producing 20,000 speaker units:  Cartunes has offered to sell Audio 10,000 speakers for $56.00 each.
Should Audio Labs make or buy the parts if the facilities remain idle when speakers are purchased?
A) buy, save $16.00 per unit 
B) buy, save $4.00 per unit 
C) make, save $2.00 per unit 
D) make, save $4.00 per unit 
E) make, save $6.00 per unit

Quizplus · Accepted Answer

11ea8545_3d97_afc7_a343_a71c8762b5d9_TB2722_00 $52 - $56 = (4); fixed costs are the same under both alternatives

Answer the Following Question(s) Using the Information Below