Below is cost data for Zoom's production of wheels, seats, and calipers. Outside suppliers have offered to provide wheels for $7.29, seats for $7.79, and calipers for $2.53 per piece. Both wheels and seats are branded with the Zoom logo, and that logo will need to be added at the Zoom factory at a cost of $0.50 each for any of these components that are outsourced. For all three components, 75% of the fixed costs are avoidable, and will be eliminated if the component's production is outsourced. In addition, seats and calipers are both produced out of the same small factory space. If both seats and calipers were outsourced, Zoom could lease the space out and increase net income by $6,000 per year, while eliminating all fixed costs for the two components.

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Madilyn Gonzalez

7 September, 00:11

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Anabella Fleming · Answer 1

Derek will receive 25000 dollars for every car he sells. That does not include the 75 cents he will get at the end of each year