A company is at capacity and has to make a decision whether to make or buy a new non-patentable product. The controller of the company prepared an in-house cost estimate, which is shown below:

Labor	$10.00
Material	$25.00
Tooling	$0.00
Manufacturing Overhead	15.00
Factory Cost	$50.00
SGA Overhead	$5.00
Total Cost	$55.00

The purchasing agent looked at the internal cost structure and realized that there were a few errors that needed to be adjusted before he could make a good comparison with the supplier quotes.

• Labor costs are 10% less than the initial calculated cost because of the misallocation of material handlers in this category.
• An additional $2.00 needs to be added because a new machine has to be purchased (tooling).
• The cost of materials has increased by 25%.
• SGA Overhead is 10% of Factory Cost
• Manufacturing Overhead is 150% of Labor Costs

What is the adjusted total cost of this product?

A) $61.50

B) $63.00

C)$65.25

D) $61.33