Carl Lewis Pty Ltd makes 20 000 bolts for use in production. The cost to make the bolts is $20 per unit including $15 in variable costs and $5 in fixed overhead applied. If Carl Lewis buys the bolts from Johnson, the cost would be $18 per unit and the released facilities could not be used for any other activity. Eighty per cent of the fixed overhead would continue. Determine the relevant costs to make the bolts.

Select one:

$320 000

$380 000

$360 000

$300 000