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Jobs Inc. produces the Ultimate computer chip: Unit Cost Direct materials $ 200 Direct labor 240 Variable overhead 160 Fixed overhead (40% avoidable) 300 An
Jobs Inc. produces the Ultimate computer chip:
Unit Cost
Direct materials $ 200
Direct labor 240
Variable overhead 160
Fixed overhead (40%
avoidable) 300
An outside supplier has offered to produce the chip for Jobs Inc. for $700.
What is the relevant cost of making the computer chip?
Multiple Choice
$720
$900
$600
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