30. In a make-or-buy decision, a potential supplier comes to you offering to make your product for you for you to resell to your customers. Your cost structure per unit looks like this: DM $11 DL $13 VOH $ 7 FOH $10 Your capacity is 100,000 units and you always sell all 100,000 units you make. You also have $500,000 of administrative fixed costs which you cannot avoid. If you accept the supplier's offer, you will be able to avoid 70% of the Fixed Overhead. Ignoring other factors such as losing full control of the quality of your product, at what price would your net income be the same whether the supplier makes your product or you continue to make it ? O $31 O $34 O$38 O $44 O $49

30. In a make-or-buy decision, a potential supplier comes to you offering to make your product for you for you to resell to your customers. Your cost structure per unit looks like this: DM $11 DL $13 VOH $ 7 FOH $10 Your capacity is 100,000 units and you always sell all 100,000 units you make. You also have $500,000 of administrative fixed costs which you cannot avoid. If you accept the supplier's offer, you will be able to avoid 70% of the Fixed Overhead. Ignoring other factors such as losing full control of the quality of your product, at what price would your net income be the same whether the supplier makes your product or you continue to make it ? O $31 O $34 O$38 O $44 O $49

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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