Multiple Choice
Copter Company currently produces a key part at a total cost of $210,000.Variable costs are $170,000.Of the fixed cost, $10,000 relate specifically to this part.The remaining fixed costs are unavoidable. Another manufacturer has offered to supply the part for $190,000.The facilities currently used to manufacture the part could be used to manufacture a new product with an expected contribution margin of $30,000.Alternately, the facilities could be rented out at $60,000.Given all of these alternatives, _____ is Copter's lowest net cost for the part.
A) $170,000
B) $180,000
C) $190,000
D) $130,000
Correct Answer:
Verified
Correct Answer:
Verified
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