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horsena [70]
2 years ago
6

Max Company uses 20,000 units of Part A in producing its products. A supplier offers to make Part A for $7. Max Company has rele

vant costs of $8 a unit to manufacture Part A. If there is excess capacity, the opportunity cost of not buying Part A from the supplier is:________
a) $20,000.
b) $0.
c) $160,000.
d) $140,000.
Business
1 answer:
Vadim26 [7]2 years ago
6 0

Answer:

$20,000

Explanation:

Max company makes use of 20,000 units of part A to manufacture its product

A supplier offers to produce part A for $7

Max company has relevant costs to $8 per unit to produce part A

Therefore, the opportunity cost of not buying part A from the supplier can be calculated as follows

Opportunity cost= 20,000 units of part A($8-$7)

= 20,000 units×$1

= 20,000×$1

= $20,000

Hence the opportunity cost of not buying part A from the supplier when there is excess capacity is $20,000

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qwelly [4]

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Please answer the following question:
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Answer:

The response options are:

a) The chances are high that your decision will be biased, especially because the current problem is complex and past patterns will be an inaccurate guide.

b) You will make a decision that is about 80 percent accurate, which is good enough to meet your objectives given the time and information at your disposal."

c) You will rate all alternatives against known criteria and choose the course of action that will maximize return to the organization.

d) Your decision will be based primarily on your preconceptions about social media, what you learn about social media as you begin your research, and Mi Ola's past experiences engaging with customers online.

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