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Green Manufacturing Makes 30,000 Units Per Year of a Part

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Green Manufacturing makes 30,000 units per year of a part used in the manufacture of its new camcorder.An outside supplier has offered to sell Green all of these parts for $48 a unit.If the parts were purchased from the supplier,all of the direct labor costs would be avoided as well as $5 of manufacturing overhead costs per unit.Product cost information for the part under review follows: Green Manufacturing makes 30,000 units per year of a part used in the manufacture of its new camcorder.An outside supplier has offered to sell Green all of these parts for $48 a unit.If the parts were purchased from the supplier,all of the direct labor costs would be avoided as well as $5 of manufacturing overhead costs per unit.Product cost information for the part under review follows:   How much of the unit product cost is relevant in the decision of whether to make or buy the part? A)  $15. B)  $25. C)  $40. D)  $45. How much of the unit product cost is relevant in the decision of whether to make or buy the part?


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