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

Direct material	$	7.50
Direct labor		23.50
Overhead		37.50
Total product cost per unit	$	68.50

An outside supplier offers to provide Factor with all the units it needs at $44.00 per unit. If Factor buys from the supplier, the company will still incur 60% of its overhead. Factor should choose to:

Multiple Choice

• Buy since the relevant cost to make it is $53.50.

• Make since the relevant cost to make it is $31.00.

• Make since the relevant cost to make it is $46.00.

• Buy since the relevant cost to make it is $46.00.

• Buy since the relevant cost to make it is $31.00.