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Use the following to answer questions 9-10: Ortiz Co. produces 5,000 units of part A12E. The following costs were incurred for that level of production:
Use the following to answer questions 9-10: Ortiz Co. produces 5,000 units of part A12E. The following costs were incurred for that level of production: $ 55,000 160,000 75,000 175,000 Direct materials Direct labor Variable overhead Fixed overhead If Ortiz buys the part from an outside supplier, $40,000 of the fixed overhead is avoidable. 9. What is the relevant cost per unit of part A12E? A) $58 B) $85 C) $93 D) $66 If the outside supplier offers a unit price of $68, net income will increase (decrease) by A) $(10,000). B) $125,000. C) $(50,000) D) $85,000. 10
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