Upfront resource spending a is always relevant

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Mathematics for Elementary School Teachers
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Chapter 3 / Exercise 1
Mathematics for Elementary School Teachers
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34.Upfront resource spending:a.Is always relevant because it relates to the futureb.Is always relevant because it could reduce future costsc.Is a sunk cost and therefore never relevantd.Is always relevant because upfront resource spending will generate future revenues or be-nefitsANS: C
PTS:1OBJ:18-335.Foster Industries manufactures 20,000 components per year. The manufacturing cost of the compon-ents was determined as follows:Direct materials$150,000Direct labor240,000Inspecting products60,000Providing power30,000Providing supervision40,000Setting up equipment60,000Moving materials20,000Total$600,000If the component is not produced by Foster, inspection of products and provision of power costs will only be 10% of the production costs; moving materials costs and setting up equipment costs will only be 50% of the production costs; and supervision costs will amount to only 40% of the production amount.An outside supplier has offered to sell the component for $25.50.What is the effect on income if Foster Industries purchases the component from the outside supplier?
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Mathematics for Elementary School Teachers
The document you are viewing contains questions related to this textbook.
Chapter 3 / Exercise 1
Mathematics for Elementary School Teachers
Bassarear
Expert Verified
)
PTS:1OBJ:18-436.Vest Industries manufactures 40,000 components per year. The manufacturing cost of the components was determined as follows:Direct materials$ 75,000Direct labor120,000Variable manufacturing overhead45,000Fixed manufacturing overhead60,000Total$300,000An outside supplier has offered to sell the component for $12.75.What is the effect on income if Vest Industries purchases the component from the outside supplier?
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