Use the following to answer the questions below.
A company is considering two options for the production of a part needed downstream in the manufacturing process.Particulars are as follows:

-Refer to the instruction above.What does the company save each month by selecting this low-cost option (for monthly requirements of 3,000 units)?
A)$1,000
B)$3,000
C)$6,000
D)Can't be determined with information given.

Question

Use the following to answer the questions below.
A company is considering two options for the production of a part needed downstream in the manufacturing process.Particulars are as follows:
 
-Refer to the instruction above.What does the company save each month by selecting this low-cost option (for monthly requirements of 3,000 units)?
A)$1,000 
B)$3,000 
C)$6,000 
D)Can't be determined with information given.

Quizplus · Accepted Answer

The low-cost option saves $1 per unit compared to the high-cost option. For a monthly requirement of 3,000 units, this amounts to a monthly savings of $3,000 (3,000 units x $1 per unit). Therefore, selecting the low-cost option would be the best choice in terms of cost savings.

Use the Following to Answer the Questions Below