A supplier of components for the automotive industry has the opportunity to purchase a job lot of parts which it would normally manufacture. The purchase price is $80 000. The production costs for the same number of units are: Should the parts be purchased and why?
A) Yes, because it saves $80 000.
B) Yes, because it saves $20 000.
C) No, because it costs $100 000.
D) No, because it costs $20 000.

Question

A supplier of components for the automotive industry has the opportunity to purchase a job lot of parts which it would normally manufacture. The purchase price is $80 000. The production costs for the same number of units are:  Should the parts be purchased and why?
A) Yes, because it saves $80 000. 
B) Yes, because it saves $20 000. 
C) No, because it costs $100 000. 
D) No, because it costs $20 000.

Quizplus · Accepted Answer

The Answer of A supplier of components for the automotive industry has the opportunity to purchase a job lot of parts which it would normally manufacture. The purchase price is $80 000. The production costs for the same number of units are:  Should the parts be purchased and why?
A) Yes, because it saves $80 000. 
B) Yes, because it saves $20 000. 
C) No, because it costs $100 000. 
D) No, because it costs $20 000.

A Supplier of Components for the Automotive Industry Has the Opportunity