Zipco is in serious negotiations to purchase a chunking machine that will enable them to perform their own chunking at $1 per unit. They currently have their chunking outsourced at a cost of $1.50 per unit and a fixed cost of $45,000
Their marketing team feels that they can sustain an annual volume of 10,000 units. What is the maximum fixed cost that Zipco should be willing to bear in order to perform their own chunking?
A) $50,000
B) $45,000
C) $40,000
D) $35,000
A
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The probability of the union of two events cannot be less than the probability of their intersection
Indicate whether the statement is true or false
When a subsidiary owns shares of the parent, the subsidiary's investment account a. should be accounted for using the equity method
b. is not eliminated so the subsidiary's investment in the parent is displayed on the balance sheet. c. is maintained at its original cost since the shares have no claim on income. d. may be accounted for using the cost, equity or sophisticated equity method.