Fornelli, Inc. can produce 100 units of a component part with the following costs: If Fornelli, Inc. can purchase the component part externally for $88,000 and only $8,000 of the fixed costs can be avoided, what is the correct make-or-buy decision?
A) Make and save $1,000
B) Buy and save $1,000
C) Make and save $5,000
D) Buy and save $13,000

Question

Fornelli, Inc. can produce 100 units of a component part with the following costs:  If Fornelli, Inc. can purchase the component part externally for $88,000 and only $8,000 of the fixed costs can be avoided, what is the correct make-or-buy decision?
A) Make and save $1,000 
B) Buy and save $1,000 
C) Make and save $5,000 
D) Buy and save $13,000

Quizplus · Accepted Answer

The Answer of Fornelli, Inc. can produce 100 units of a component part with the following costs:  If Fornelli, Inc. can purchase the component part externally for $88,000 and only $8,000 of the fixed costs can be avoided, what is the correct make-or-buy decision?
A) Make and save $1,000 
B) Buy and save $1,000 
C) Make and save $5,000 
D) Buy and save $13,000