Assume the following cost data relate to the decision to produce

Total units expected to be produced or bought from the market = 10,000

Total Costs

Unit Cost

Direct materials

20,000

2.00

Direct labor

25,000

2.50

Variable overhead

15,000

1.50

Fixed overhead (non-avoidable)

24000

2.40

Fixed overhead (avoidable)

26,000

2.60

Purchase cost

90,000

Should the company acquire the product form the market?

a.Yes

b.No

c.Indifferent to to make or to buy

d.Yes if the market price per unit less than $4.50