Use the Following Information for Questions
Ortiz Co If Ortiz Buys the Part from an Outside Supplier, $40,000

question 49

Multiple Choice

Use the following information for questions
Ortiz Co. produces 5,000 units of part A12E. The following costs were incurred for that level of production: $$\begin{array} { l r } \text { Direct materials } & \$ 55,000 \\\text { Direct labor } & 160,000 \\\text { Variable overhead } & 75,000 \\\text { Fixed overhead } & 175,000\end{array}$$ If Ortiz buys the part from an outside supplier, $40,000 of the fixed overhead is avoidable.
-What is the relevant cost per unit of part A12E?

• A) $58
• B) $85
• C) $93
• D) $66

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Definitions:

Consistent

Marked by harmony, regularity, or steady continuity; free from variation or contradiction.

Disjunction

A logical operation yielding a truth value of true if at least one of the operands is true; often represented with the word "or" in logic.

Consistent

A property of a set of statements that allows them all to be true at the same time without contradiction.

Contingency

A forthcoming incident or situation which may occur but its certainty cannot be ascertained.