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Calculate the relevant cost for producing the product

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Reference no: EM132095806

Question - Make or Buy Terry Inc. manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an offer from a subcontractor to provide 1,800 units of product OP89 for $81,000. If Terry does not purchase these parts from the subcontractor, it must continue to produce them in-house with these costs:

 

Costs per Unit

  Direct materials

$23

  Direct labor

14

  Variable overhead

12

  Allocated fixed overhead

4

Required: Calculate the relevant cost for producing the product.

Reference no: EM132095806

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