ColorPro uses part 87A in the production of color printers.Unit manufacturing costs for part 87A are:
ColorPro uses 100,000 units of 87A per year.Filbert Company has offered to sell ColorPro 100,000 units of 87A per year for $12.Fixed overhead is unavoidable.
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Which of the following is a qualitative factor that might affect ColorPro's decision?
A) Filbert has an outstanding reputation for quality.
B) Ordering from Filbert would give ColorPro a chance to see how well Filbert could meet JIT standards for ColorPro's other products.
C) Filbert is known for the reliability of its products.
D) Making the part in-house would help ColorPro avoid layoffs of direct and indirect labor.
E) All of these.

Question

ColorPro uses part 87A in the production of color printers.Unit manufacturing costs for part 87A are:  
 ColorPro uses 100,000 units of 87A per year.Filbert Company has offered to sell ColorPro 100,000 units of 87A per year for $12.Fixed overhead is unavoidable.
- 
Which of the following is a qualitative factor that might affect ColorPro's decision?
A) Filbert has an outstanding reputation for quality. 
B) Ordering from Filbert would give ColorPro a chance to see how well Filbert could meet JIT standards for ColorPro's other products. 
C) Filbert is known for the reliability of its products. 
D) Making the part in-house would help ColorPro avoid layoffs of direct and indirect labor. 
E) All of these.

Quizplus · Accepted Answer

All the options listed are qualitative factors because they involve subjective or descriptive aspects that can affect ColorPro's decision, such as reputation, opportunity to test JIT standards, reliability, and employment considerations, rather than quantitative factors like cost or time.

ColorPro Uses Part 87A in the Production of Color Printers