Scenario 2.6
You currently purchase a part used in your production process from an outside supplier, and have decided to begin making this part in-house. You have two equipment options for moving production in-house: special-purpose equipment and general-purpose equipment. Cost information for these two options is as follows:

-Use Scenario 2.6 to answer this question. What are total costs under the Special-Purpose Equipment option for an annual quantity of 40,000 units?
A) $400,000
B) $500,000
C) $800,000
D) $850,000

Question

Scenario 2.6
You currently purchase a part used in your production process from an outside supplier, and have decided to begin making this part in-house. You have two equipment options for moving production in-house: special-purpose equipment and general-purpose equipment. Cost information for these two options is as follows:
 
-Use Scenario 2.6 to answer this question. What are total costs under the Special-Purpose Equipment option for an annual quantity of 40,000 units?
A) $400,000 
B) $500,000 
C) $800,000 
D) $850,000

Quizplus · Accepted Answer

The total costs under the Special-Purpose Equipment option for an annual quantity of 40,000 units are calculated by adding the fixed costs to the variable costs. Without the specific details from Scenario 2.6, the correct answer is based on the assumption that the provided choice matches the calculation from the given scenario.

Scenario 2.6 You Currently Purchase a Part Used in Your Production Process