Mason Holgate Ltd makes 20 000 units of a part. The cost to make the part is $15 in variable costs and $5 in fixed overhead applied, so $20 in total. If Mason Holgate Ltd buys the part from an external supplier, the cost would be $18 per unit and the released capacity could not be used for any other activity. Eighty per cent of the fixed overhead would continue. Determine the relevant costs to make the part.

Select one:

$380 000

$320 000

$300 000

$360 000