UESTION 30

1. In a decision whether to make or buy a part, the maximum price (per unit) that one is willing to pay for Buy is:

   	A.	Manufacturing cost of Make (per-unit)
   	B.	Opportunity cost plus Avoidable cost of Make (per unit)
   	C.	Avoidable cost of Make (per unit)
   	D.	Unavoidable cost plus Opportunity cost of Make (per unit)

3 points

QUESTION 31

1. In a make or buy (outsourcing) decision, which one of the following considerations is a relevant qualitative facor?

   	A.	If we buy the part from outside, our fixed expenses will drop by half.
   	B.	If we buy the part, we have to rely on other guys for a very important part.
   	C.	Whether we make the part or buy it, our president will be equally happy.
   	D.	We can resell unused part to either TrustMe or BelieveMe. Selling to TrustMe will enhance our corporate reputation more.

3 points

QUESTION 32

1. You can make a product for 100 units. You can sell all of them to your regular customers for $500 each. At the 100 units of production level, the cost of the product is $430 per unit ($300 variable; $130 fixed). Someone (who is not a regular customer) wants the product from you. To maximize your monetary benefit, you should charge the buyer at least ______ per unit?

   	A.	$130
   	B.	$500
   	C.	$430
   	D.	$300