1. Factor Co. can produce a unit of product for the following costs:

Direct material	$	7.40
Direct labor		23.40
Overhead		37.00
Total product cost per unit	$	67.80

An outside supplier offers to provide Factor with all the units it needs at $39.90 per unit. If Factor buys from the supplier, the company will still incur 70% of its overhead. Factor should choose to:

• Make since the relevant cost to make it is $41.90.

• Buy since the relevant cost to make it is $30.80.

• Buy since the relevant cost to make it is $56.70.

• Buy since the relevant cost to make it is $41.90.

• Make since the relevant cost to make it is $30.80

2. Maxim manufactures a hamster food product called Green Health. Maxim currently has 21,500 bags of Green Health on hand. The variable production costs per bag are $3.40 and total fixed costs are $26,000. The hamster food can be sold as it is for $10.00 per bag or be processed further into Premium Green and Green Deluxe at an additional cost. The additional processing will yield 21,500 bags of Premium Green and 4,600 bags of Green Deluxe, which can be sold for $9 and $7 per bag, respectively. Assuming Maxim further processes Green Health further into Premium Green and Green Deluxe, revenue from the two products would be:

• $10,700.

• $1,500.

• $224,200.

• $225,700.

• $9,200.

3. Carlys Clips charges for their grooming services based on the following:

Direct labor rate	$	64	per hour
Materials markup		25	%

Using time and materials pricing, what is the total price for a job requiring 3 direct labor hours and $54 of materials?

Thank you!