Epsilon Co.can produce a unit of product for the following costs: An outside supplier offers to provide Epsilon with all the units it needs at $60 per unit.If Epsilon buys from the supplier,the company will still incur 40% of its overhead.Epsilon should choose to:
A)Buy since the relevant cost to make it is $72.
B)Make since the relevant cost to make it is $56.
C)Buy since the relevant cost to make it is $48.
D)Make since the relevant cost to make it is $48.
E)Buy since the relevant cost to make it is $56.

Question

Epsilon Co.can produce a unit of product for the following costs:  An outside supplier offers to provide Epsilon with all the units it needs at $60 per unit.If Epsilon buys from the supplier,the company will still incur 40% of its overhead.Epsilon should choose to:
A)Buy since the relevant cost to make it is $72. 
B)Make since the relevant cost to make it is $56. 
C)Buy since the relevant cost to make it is $48. 
D)Make since the relevant cost to make it is $48. 
E)Buy since the relevant cost to make it is $56.

Quizplus · Accepted Answer

The Answer of Epsilon Co.can produce a unit of product for the following costs:  An outside supplier offers to provide Epsilon with all the units it needs at $60 per unit.If Epsilon buys from the supplier,the company will still incur 40% of its overhead.Epsilon should choose to:
A)Buy since the relevant cost to make it is $72. 
B)Make since the relevant cost to make it is $56. 
C)Buy since the relevant cost to make it is $48. 
D)Make since the relevant cost to make it is $48. 
E)Buy since the relevant cost to make it is $56.