Consider the Following Two Activities: (1) Performing Warranty Work, Cost

Multiple Choice

Consider the following two activities: (1) performing warranty work, cost: $60,000.The warranty cost of the most efficient competitor is $10,000.(2) Purchasing components, cost: $100,000 (5,000 purchase orders) .A study reveals that the most efficient level would use 2,500 purchase orders and entail a cost of $55,000. What is the total nonvalue-added cost?

A) $55,000
B) $60,000
C) $105,000
D) $100,000