Question
Factor Co. can produce a unit of product for the following costs: Direct material $ 9.00 Direct labor 25.00 Overhead 45.00 Total product cost per
Factor Co. can produce a unit of product for the following costs:
| Direct material | $ | 9.00 | |
| Direct labor | 25.00 | ||
| Overhead | 45.00 | ||
| Total product cost per unit | $ | 79.00 |
An outside supplier offers to provide Factor with all the units it needs at $45.50 per unit. If Factor buys from the supplier, the company will still incur 70% of its overhead. Factor should choose to:
| Make since the relevant cost to make it is $47.50. | ||
| Buy since the relevant cost to make it is $34.00. | ||
| Make since the relevant cost to make it is $34.00. | ||
| Buy since the relevant cost to make it is $47.50. | ||
| Buy since the relevant cost to make it is $65.50. |
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Rising From The Mailroom To The Boardroom Unique Insights For Governance Risk Compliance And Audit Leaders
Authors: Bruce Turner
1st Edition
1032042907, 978-1032042909
