Talk industries makes cellular phones, and it is thinking about purchasing (rather than producing) one...
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Talk industries makes cellular phones, and it is thinking about purchasing (rather than producing) one of the parts used in these phones. If Talk opts to purchase, the machine that is now used to produce the part can instead be used to manufacture a new part expected to generate a total annual contribution margin of $134,500. This machine originally cost $200,000 when purchased one year ago, In this scenario. the $200,000 represents a variable cost. the $134,500 represents a variable cost. the $200,000 represents an opportunity cost. the $134,500 represents an opportunity cost
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