materia. 230 IogeT Facility-level depreciation of manufacturing equip. Product-level engine production supervisor's salary Annual facility-level utilities $ 6,100/month $ 3,100/month $20,500

Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
icon
Related questions
Question
U-RIDE, Inc. currently produces the electric engines that are used in golf carts made and sold by the Company. Electco has offered to sell the electric
engines to U-RIDE at a price of $277 each.
Current production information follows:
Unit-level material and labor
2$
230
Facility-level depreciation of manufacturing equip.
Product-level engine production supervisor's salary
Annual facility-level utilities
$ 6,100/month
$ 3,100/month
$20,500
Buying the engines will free up manufacturing capacity that could be used to make a new economy line golf cart that would produce an additional
$11,600 profit per year. U-RIDE is currently operating profitably producing and selling 3,100 engines annually. Based on this information, which of the
following is true?
Multiple Choice
The $111,600 is not relevant because it is an estimate.
Buying the units would increase U-RIDE's cost by $35 per unit.
< Prev
8 9
Score answer >
of 10
Transcribed Image Text:U-RIDE, Inc. currently produces the electric engines that are used in golf carts made and sold by the Company. Electco has offered to sell the electric engines to U-RIDE at a price of $277 each. Current production information follows: Unit-level material and labor 2$ 230 Facility-level depreciation of manufacturing equip. Product-level engine production supervisor's salary Annual facility-level utilities $ 6,100/month $ 3,100/month $20,500 Buying the engines will free up manufacturing capacity that could be used to make a new economy line golf cart that would produce an additional $11,600 profit per year. U-RIDE is currently operating profitably producing and selling 3,100 engines annually. Based on this information, which of the following is true? Multiple Choice The $111,600 is not relevant because it is an estimate. Buying the units would increase U-RIDE's cost by $35 per unit. < Prev 8 9 Score answer > of 10
my iliie goiI Cail ilat vvouiu prouuce dii additional
$111,600 profit per year. U-RIDE is currently operating profitably producing and selling 3,100 engines annually. Based on this information, which of the
following is true?
Multiple Choice
The $111,600 is not relevant because it is an estimate.
Buying the units would increase U-RIDE's cost by $35 per unit.
U-RIDE has avoidable costs of less than $277 per unit and should therefore buy engines.
The cost of buying the engines is $1 per unit less than the relevant cost of making the units.
< Prev
8 9
of 10
Score answer >
DII
DD
80
888
F9
F10
11
F7
F8
F4
Transcribed Image Text:my iliie goiI Cail ilat vvouiu prouuce dii additional $111,600 profit per year. U-RIDE is currently operating profitably producing and selling 3,100 engines annually. Based on this information, which of the following is true? Multiple Choice The $111,600 is not relevant because it is an estimate. Buying the units would increase U-RIDE's cost by $35 per unit. U-RIDE has avoidable costs of less than $277 per unit and should therefore buy engines. The cost of buying the engines is $1 per unit less than the relevant cost of making the units. < Prev 8 9 of 10 Score answer > DII DD 80 888 F9 F10 11 F7 F8 F4
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles Of Marketing
Principles Of Marketing
Marketing
ISBN:
9780134492513
Author:
Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:
Pearson Higher Education,
Marketing
Marketing
Marketing
ISBN:
9781259924040
Author:
Roger A. Kerin, Steven W. Hartley
Publisher:
McGraw-Hill Education
Foundations of Business (MindTap Course List)
Foundations of Business (MindTap Course List)
Marketing
ISBN:
9781337386920
Author:
William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:
Cengage Learning
Marketing: An Introduction (13th Edition)
Marketing: An Introduction (13th Edition)
Marketing
ISBN:
9780134149530
Author:
Gary Armstrong, Philip Kotler
Publisher:
PEARSON
MKTG 12:STUDENT ED.-TEXT
MKTG 12:STUDENT ED.-TEXT
Marketing
ISBN:
9781337407595
Author:
Lamb
Publisher:
Cengage
Contemporary Marketing
Contemporary Marketing
Marketing
ISBN:
9780357033777
Author:
Louis E. Boone, David L. Kurtz
Publisher:
Cengage Learning