Gordon Corporation produced 10,000 digital watches in the current year. Variable costs are $8 per watch. Overhead assigned is $2.25 per watch. A supplier offers the watches for $9.50 each. Gordon's production manager reports the incremental overhead is $1.25 per watch.
Gordon should:
A. Continue making watches as an additional $1.50 per watch would be incurred if bought from the supplier.
B. Continue making watches as an additional $0.25 per watch would be incurred if bought from the supplier.
C. Buy the watches as they would save $0.75 per watch.
D. Buy the watches as they would save $1.50 per watch.
E. Buy the watches as they would save $1.75 per watch.

Gordon should continue making watches, as an additional $0.25 per watch would be incurred if bought from the supplier. Hence, option B is correct.

Who is supplier?

An entity that offers goods or services to another entity is known as a supplier. One example of a supplier is a business that sells PCBAs to a laptop manufacturer or OEM.

A supplier is defined as a person or organization that serves as the source for goods or services. A supplier is a business that provides microprocessors to a significant computer corporation. A supplier is someone who gives heroin to a heroin addict, such as a drug dealer.

People can find 16 alternative words for supplier on this page, including vendor, distributor, provider, manufacturer, retailer, product, importer, wholesaler, oems, contractor, and null.

Thus, option B is correct.

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