Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Giada Company produces 23,000 units of a component part used in tablet computers. An outside supplier has offered to supply the part for $1.19. The unit cost is: Direct materials $0.75 Direct labor 0.261 Variable overhead 0.11 Fixed overhead 2.10. Total unit cost $3.22 Required: 1. What are the alternatives for Giada Company? Make the part in house Buy the part externally Make the part in house or buy the part externally None Ust the relevant cost of external purchase: relevant cost(s) of internal production. 3. Which alternative is more cost effective and by how much? by 4. What if $19,640 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much? Previous Next Submit Test for Grading