(LO 8) Factor Co. can produce a unit of product for the following costs:

Direct material $ 7.60

Direct labor 23.60

Overhead 38.00

Total costs per unit $ 69.20

An outside supplier offers to provide Factor with all the units it needs at $42.50 per unit. If Factor buys from the supplier, the company will still incur 65% of its overhead. Factor should choose to:

Multiple Choice

• Buy since the relevant cost to make it is $55.90.
• Make since the relevant cost to make it is $44.50.
• Buy since the relevant cost to make it is $44.50.
• Make since the relevant cost to make it is $31.20.
• Buy since the relevant cost to make it is $31.20.