Sharp Corporation produces 8,000 parts each year, which are used in the production of one of its products.The unit product cost of a part is $36, computed as follows: The parts can be purchased from an outside supplier for only $28 each.The space in which the parts are now produced would be idle and fixed production costs would be reduced by one-fourth.Based on these data, the financial advantage (disadvantage)of purchasing the parts from the outside supplier would be:
A)$24,000
B)($24,000)
C)$56,000
D)($56,000)

Question

Sharp Corporation produces 8,000 parts each year, which are used in the production of one of its products.The unit product cost of a part is $36, computed as follows:  The parts can be purchased from an outside supplier for only $28 each.The space in which the parts are now produced would be idle and fixed production costs would be reduced by one-fourth.Based on these data, the financial advantage (disadvantage)of purchasing the parts from the outside supplier would be:
A)$24,000 
B)($24,000) 
C)$56,000 
D)($56,000)

Quizplus · Accepted Answer

11ea7998_5c5a_40b5_911b_7d6918e8f34a_TB2627_00_TB2627_00

Sharp Corporation Produces 8,000 Parts Each Year, Which Are Used