Factor Co
Subject:AccountingPrice:3.87 Bought7
Factor Co. can produce a unit of product for the following costs:
| Direct material | $8.40 |
| Direct labor | 24.40 |
| Overhead | 42.00 |
| Total costs per unit |
$74.80 |
|
An outside supplier offers to provide Factor with all the units it needs at $43.40 per unit. If Factor buys from the supplier, the company will still incur 70% of its overhead. Factor should choose to: Buy since the relevant cost to make it is $62.20. Make since the relevant cost to make it is $45.40. Buy since the relevant cost to make it is $45.40. Make since the relevant cost to make it is $32.80. Buy since the relevant cost to make it is $32.80. |
