The following standard costs pertain to a component part manufactured by Ashby Company: The company can purchase the part from an outside supplier for $25 per unit.The manufacturing overhead is 60% fixed and this fixed portion would not be affected by this decision.Assume that direct labour is an avoidable cost in this decision.What is the relevant amount of the standard cost per unit to be considered in a decision of whether to make the part internally or buy it from the external supplier?
A) $2.
B) $15.
C) $19.
D) $27.

Question

The following standard costs pertain to a component part manufactured by Ashby Company:  The company can purchase the part from an outside supplier for $25 per unit.The manufacturing overhead is 60% fixed and this fixed portion would not be affected by this decision.Assume that direct labour is an avoidable cost in this decision.What is the relevant amount of the standard cost per unit to be considered in a decision of whether to make the part internally or buy it from the external supplier?
A) $2. 
B) $15. 
C) $19. 
D) $27.

Quizplus · Accepted Answer

The Answer of The following standard costs pertain to a component part manufactured by Ashby Company:  The company can purchase the part from an outside supplier for $25 per unit.The manufacturing overhead is 60% fixed and this fixed portion would not be affected by this decision.Assume that direct labour is an avoidable cost in this decision.What is the relevant amount of the standard cost per unit to be considered in a decision of whether to make the part internally or buy it from the external supplier?
A) $2. 
B) $15. 
C) $19. 
D) $27.

The Following Standard Costs Pertain to a Component Part Manufactured