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Epsilon Co. can produce a unit of product for the following costs: Direct material $8.40 Direct labor 24.40 Overhead 42.00 Total costs per unit $74.80

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

Direct material $8.40
Direct labor 24.40
Overhead 42.00
Total costs per unit $74.80

An outside supplier offers to provide Epsilon with all the units it needs at $66.20 per unit. If Epsilon buys from the supplier, the company will still incur 30% of its overhead. Epsilon should choose to:

Buy since the relevant cost to make it is $74.80.

Make since the relevant cost to make it is $62.20.

Buy since the relevant cost to make it is $45.40.

Make since the relevant cost to make it is $45.40.

Buy since the relevant cost to make it is $62.20.

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