Factor Company estimates that producing a unit of product would require $8.40 per unit of direct materials and $24.40 per unit of direct labor. Factor Company normally applies overhead using a predetermined overhead rate of 150% of direct labor cost. Factor Company estimates incremental overhead of $12.60 per unit of product. An outside supplier offers to provide Factor Company with all the units it needs at a price of $43.40 per unit. Factor Company should choose to:

Multiple Choice

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

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

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

Make since the relevant cost to make it is $32.80.

Buy since the relevant cost to make it is $32.80.