5. B) $379.50
Based on the table because he is a 50 year old male, the cost per thousand is $7.59. Multiply this by 50 because he wants $50,000 worth of coverage
6. B) $94,165
The cost to secure the loan in the down payment and all other fees. The down payment is 30%* $310,000= $93,000
Add all the fees together $1165 plus the down payment = $94,165
Answer:
Particulars Make Buy Incremental cost
Manufacturing cost $474,000 $474,000
Purchase $393,420 ($393,420)
(474,000*$0.83)
Fixed Cost $94,800 ($94,800)
(474,000*$0.20)
Total relevant cost $474,000 $488,220 ($14,220)
Conclusion: The company should make the fitting and the incremental savings will be $14,220
I think b is the correct answer
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