QUESTION 18

1. Genent's Preserves currently makes jams and jellies and a variety of decorative jars used for packaging. An outside supplier has offered to supply all of the needed decorative jars. For this make-or-buy decision, a cost analysis revealed the following avoidable unit costs for the decorative jars:

   Direct materials

   $0.52

   Direct labor

   0.12

   Unit-related support costs

   0.23

   Batch-related support costs

   0.30

   Product-sustaining support costs

   0.49

   Facility-sustaining support costs

   0.60

   Total cost per jar

   $2.26

   The maximum price that Genent's Preserves should be willing to pay for the decorative jars is ________.

   		$0.64 per jar
   		$2.26 per jar
   		$0.87 per jar
   		$0.49 per jar