. If it outsources the navigation system, fixed costs could be reduced by half, and the vacant facilities could be rented out to earn $2000 per month of rental income. What is the maximum contract cost that Fruit Boat Company should pay for outsourcing

$2,425

Explanation:

Fruit Boat should not pay more for the contract than they would if they were producing the good themselves.

= Variable cost + Avoidable fixed costs + Opportunity cost per month

Avoidable fixed cost = (39,000 / 2) / 10 boats = 19,500 / 10 = $1,950

Opportunity cost per month = 2,000 / 10 boats

= $200

Contract price = 275 + 1,950 + 200

= $2,425

answer///(d)individual rights of a person are integral to analyzing the morality of action;

answer(d) encourage cooperation by improving the chances of mutually agreeable transactions;