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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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