Solved

Answer the Following Question(s)using the Information Below

Question 162

Multiple Choice

Answer the following question(s) using the information below.Day Star collected the following information:
Answer the following question(s) using the information below.Day Star collected the following information:    Day Star can sell 25,000 units per year, at $80 each.The company also has an offer from a subsidiary to rent its plant facilities for $2,000,000.The fixed overhead will be incurred in each alternative, but there will be a savings of $150,000 in the fixed costs under the renting alternative. -Based on the above information only, should Day Star make or buy the product or rent its facilities out? A) buy B) make C) either make or buy - indifferent D) rent the facilities to the subsidiary E) either make or rent - indifferent Day Star can sell 25,000 units per year, at $80 each.The company also has an offer from a subsidiary to rent its plant facilities for $2,000,000.The fixed overhead will be incurred in each alternative, but there will be a savings of $150,000 in the fixed costs under the renting alternative.
-Based on the above information only, should Day Star make or buy the product or rent its facilities out?


A) buy
B) make
C) either make or buy - indifferent
D) rent the facilities to the subsidiary
E) either make or rent - indifferent

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions