Q16

Epsilon currently pays $94 per unit to buy a part for a product it sells. Epsilon has excess capacity, and estimates that making the part would incur variable costs of $8 for direct materials and $58 for direct labor. Epsilon's normal predetermined overhead rate is 150% of direct labor cost, but management computes an incremental overhead rate of $23.20 per unit to make this part Epsilon should choose to: Multiple Choice Buy since the relevant cost to make it is $102 per unit Make since the relevant cost to make it is $89.20 per unit Buy since the relevant cost to make it is more than 59400 per unit Make since the relevant cost to buy it ls $11220 per unit buy since the relevant cont to make it is $125 20 petunt