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TRUE or FALSE? The benefit foregone when one alternative is chosen over another is called an opportunity cost. True False TRUE or FALSE? Future costs that differ between alternatives are relevant costs. True False XYZ Inc. currently manufactures 100,000 units of Part A each year. Unit manufacturing costs for this part are: Direct materials $12 Direct materials $12 Variable manufacturing $10 overhead Fixed manufacturing $14 overhead Delta Company has offered to sell XYZ Inc. 100,000 units of Part A per year for $21 per unit. Fixed overhead at XYZ is unavoidable. Should XYZ make Part A or buy it from Delta and why? Make the part because it will save $1,300,000 over buying it Buy the part because it will save $1,300,000 over making it Make the part because it will save $2,700,000 over buying it Buy the part because it will save $2,700,000 over making it None of the above GameStation Inc. makes video game consoles. Currently, GameStation produces all internal components for its consoles. An outside company has offered to supply one internal component, Part E33, for $38 each. GameStation uses 37,000 units of this component in production per year. GameStation's costs to manufacture Part E33 are as follows: Direct materials $13.00 per unit Direct labor $11.50 per unit Variable manufacturing $12.75 per unit overhead Fixed manufacturing $15.00 per unit overhead If 40% of GameStation's fixed overhead is avoidable when Part 133 is outsourced, then what is the financial advantage or disadvantage of buying Part E33 from the outside supplier? Financial advantage of $27,750 Financial advantage of $194,250 O Financial disadvantage of $27.750 Financial disadvantage of $194,250 None of the above

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