Question

If Elkhart were to discontinue production, fixed manufacturing costs would be reduced by 70% The relevant cost of deciding whether the division should purchase the product from an outside supplier is: A. $540,000. B. $594,000. C. $666,000. D. $720,000. E. $726,000. 9. Boise, a division of Price Enterprises, currently performs computer services for various departments of the firm. One of the services has created a number of operating problems, and management is exploring whether to outsource the service to a consultant. Traceable variable and fixed operating costs total $80,000 and $25,000, respectively, in addition to $18,000 of corporate administrative overhead allocated from Price. If Boise were to use the outside consultant, fixed operating costs would be reduced by 70%. The irrelevant costs in Boise's outsourcing decision total: A. $17,500. B. $18,000. C. $25,000. D. $25,500. E. None of the answers is correct.

          If Elkhart were to discontinue production, fixed manufacturing costs would be reduced by 70%
The relevant cost of deciding whether the division should purchase the product from an outside
supplier is:
A. $540,000.
B. $594,000.
C. $666,000.
D. $720,000.
E. $726,000.

9. Boise, a division of Price Enterprises, currently performs computer services for various
departments of the firm. One of the services has created a number of operating problems, and
management is exploring whether to outsource the service to a consultant. Traceable variable and
fixed operating costs total $80,000 and $25,000, respectively, in addition to $18,000 of corporate
administrative overhead allocated from Price. If Boise were to use the outside consultant, fixed
operating costs would be reduced by 70%. The irrelevant costs in Boise's outsourcing decision
total:
A. $17,500.
B. $18,000.
C. $25,000.
D. $25,500.
E. None of the answers is correct.

If Elkhart were to discontinue production, fixed manufacturing costs would be reduced by 70%
The relevant cost of deciding whether the division should purchase the product from an outside
supplier is:
A. 540,000.
B.594,000.
C. 666,000.
D.720,000.
E. 726,000.

9. Boise, a division of Price Enterprises, currently performs computer services for various
departments of the firm. One of the services has created a number of operating problems, and
management is exploring whether to outsource the service to a consultant. Traceable variable and
fixed operating costs total80,000 and 25,000, respectively, in addition to18,000 of corporate
administrative overhead allocated from Price. If Boise were to use the outside consultant, fixed
operating costs would be reduced by 70%. The irrelevant costs in Boise's outsourcing decision
total:
A. 17,500.
B.18,000.
C. 25,000.
D.25,500.
E. None of the answers is correct.

Added by Courtney Q.

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