Factor Co. can produce a unit of product for the following costs: An outside supplier offers to provide Factor with all the units it needs at $46 per unit. If Factor buys from the supplier, the company will still incur 60% of its overhead. Factor should choose to:
A) Buy since the relevant cost to make it is $56.
B) Make since the relevant cost to make it is $48.
C) Buy since the relevant cost to make it is $48.
D) Make since the relevant cost to make it is $32.
E) Buy since the relevant cost to make it is $32.

Question

Factor Co. can produce a unit of product for the following costs:  An outside supplier offers to provide Factor with all the units it needs at $46 per unit. If Factor buys from the supplier, the company will still incur 60% of its overhead. Factor should choose to:
A) Buy since the relevant cost to make it is $56. 
B) Make since the relevant cost to make it is $48. 
C) Buy since the relevant cost to make it is $48. 
D) Make since the relevant cost to make it is $32. 
E) Buy since the relevant cost to make it is $32.

Quizplus · Accepted Answer

11eaadfd_cc7b_fc7a_95d8_d130b47b3732_TB6948_00

Factor Co Can Produce a Unit of Product for the Following