The Following Standard Costs Pertain to a Component Part Manufactured

question 95

Multiple Choice

The following standard costs pertain to a component part manufactured by Ashby Company:
$\begin{array}{l}\begin{array}{lll}\text { Direct Materials}\\\text { Direct Labour}\\\text {Manufacturing Overhead}\\\text { Standard Cost per Unit}\\\end{array}\begin{array}{lll}\$ 2 \\\$ 5 \\\$ 20 \\\$ 27\end{array}\end{array}$
The company can purchase the part from an outside supplier for $25 per unit.The manufacturing overhead is 60% fixed,and this fixed portion would not be affected by this decision.Assume that direct labour is an avoidable cost in this decision.What would be the relevant amount of the standard cost per unit in a decision of whether to make the part internally or buy it from the external supplier?

• A) $2.
• B) $15.
• C) $19.
• D) $27.

---

Definitions:

Self-perception

The process by which individuals form an understanding or awareness about themselves, including their traits, behaviors, and characteristics.

Unpredictable

Not able to be predicted or foreseen; capable of changing or varying without apparent pattern or reason.

Social Network Use

The extent and manner in which individuals engage with social networking platforms to communicate, share, or consume content.

Emotionally Stable

A psychological state in which an individual can manage their emotions and remain calm and composed under stress.