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26 . Alpha Co. can produce a unit of Beta for the following costs: Direct Material $4 Direct Labor 12 Overhead 20 TOTAL $36 An outside supplier offers to provide Alpha with all the Beta units it needs at $30 per unit. If Alpha buys from the supplier, Alpha will still incur 50% of its overhead. The proper decision and the total relevant cost to compare with the $30 purchase price are:

Respuesta :

Tundexi

Answer:

b. Make, $26

Explanation:

Options are "A. Buy, $26. B. Make, $26. C. Buy, $36. D. Make, $36 E. Buy, $40"

Calculation of total relevant cost

Direct materials          $4

Direct labor                 $12

Overhead                    $10 ($20 * 50%)

Total relevant cost    $26

Since the relevant cost is $26 when making, so the proper decision and the total relevant cost to compare with the $30 purchase price are "Make, $26".

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