What is the maximum amount the company should be willing to pay an outside supplier per unit for the part if the supplier commits to supplying all 70,000 units required each year?

A) $50.60 per unit
B) $3.90 per unit
C) $58.80 per unit
D) $54.90 per unit

Question

Marceil Elkomos · Accepted Answer

Final Answer : A, Explanation :    Reference: CH11-Ref14The following are Silver Corporation's unit costs of making and selling an item at a volume of 8,000 units per month (which represents the company's capacity):   Present sales amount to 7,000 units per month.An order has been received from a customer in a foreign market for 1,000 units.The order would not affect regular sales.Total fixed costs, both manufacturing and selling and administrative, would not be affected by this order.The variable selling and administrative costs would have to be incurred for this special order as well as all other sales.Assume that direct labor is a variable cost.

What is the maximum amount the company should be willing to pay an outside supplier per unit for the part if the supplier commits to supplying all 70,000 units required each year?

A) $50.60 per unit
B) $3.90 per unit
C) $58.80 per unit
D) $54.90 per unit

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What is the maximum amount the company should be willing to pay an outside supplier per unit for the part if the supplier commits to supplying all 70,000 units required each year?A) $50.60 per unitB) $3.90 per unitC) $58.80 per unitD) $54.90 per unit

Definitions

Learning Objectives

Learning Objectives

Related questions

What is the maximum amount the company should be willing to pay an outside supplier per unit for the part if the supplier commits to supplying all 70,000 units required each year?

A) $50.60 per unit
B) $3.90 per unit
C) $58.80 per unit
D) $54.90 per unit