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Find the variable cost of an airplane
Tom Terry manufactures an intricately detailed plastic and metal toy airplane. The following unit cost data pertain to the unit cost of an airplane:
Direct materials $ 5.00Direct labor 12.00Manufacturing overhead (50% fixed) 10.00Total manufacturing costs $27.00Please show work:
Assume that the airplane can be purchased from an outside supplier. What is the relevant unit cost for this make-or-buy decision?
a. $5b. $17c. $27d. $22e. none of the above. Please provide the correct answer.
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