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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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