A company owns equipment that is used to manufacture important parts for its production process. Because the
Question:
A company owns equipment that is used to manufacture important parts for its production process. Because the equipment is repeatedly breaking down, the company plans to sell the equipment for $10,000 and to select one of the following alternatives:
(1) acquire new equipment for $80,000 and continue to manufacture the part at the same variable cost,
(2) purchase the parts from an outside company at $4 per part. In the short run the company should quantitatively analyze the alternatives by comparing the variable cost of manufacturing the parts:
A. Plus $80,000, to the cost of buying the parts.
B. To the cost of buying the parts less $10,000.
C. Less $10,000 to the cost of buying the parts.
D. To the cost of buying the parts.
Statistics for the Behavioral Sciences
ISBN: 978-1111830991
9th edition
Authors: Frederick J Gravetter, Larry B. Wallnau