Rosie buys her packaging boxes at $4.00 each. Her factory is operating below capacity and she is trying to figure out if she would save money by making the boxes herself. Below is the estimated fully absorbed unit cost:

Direct material $ 1.00

Direct labor 2.50

Factory overhead (.40 of direct labor) 1.00

Total $ 4.50

If Rosie makes her own boxes, fixed overhead costs will not increase and variable factory overhead costs associated with the boxes are expected to be .10 (10%) of direct labor costs. What are the relevant costs:

a. direct material

b. direct labor

c. factory overhead

d. should Rosie make these boxes? yes or no?

(4pts)

Question 30 - Rosie buys her packaging boxes at $4.00 each. Her factory is operating below capacity and she is trying to figure out if she would save money by making the boxes herself. Below is the estimated fully absorbed unit cost: Direct material $ 1.00 Direct labor 2.50 Factory overhead (.40 of direct labor) 1.00 Total $ 4.50 If Rosie makes her own boxes, fixed overhead costs will not increase and variable factory overhead costs associated with the boxes are expected to be .10 (10%) of direct labor costs. What are the relevant costs: a. direct material b. direct labor c. factory overhead d. should Rosie make these boxes? yes or no?