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A large plant produces a complex product. The plant is currently producing a component that could be purchased from a supplier. The company reports the
A large plant produces a complex product. The plant is currently producing a component that could be purchased from a supplier. The company reports the following costs assigned to the component: $15 direct material costs per unit 25 direct labor costs per unit (workers laid off with purchase from supplier) 10 electric costs per unit (for running machinery) In the make/buy decision, which of the following costs is a relevant cost? Select one: O a direct materials O b. direct labor O c. direct materials and direct labor O d. direct materials and electric O e. direct materials, direct labor, and electric
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