Epsilon Co An Outside Supplier Offers to Provide Epsilon with All the Following

question 91

Multiple Choice

Epsilon Co. can produce a unit of product for the following costs: $\begin{array}{llcc} \text { Direct material } &\$8\\ \text { Direct labor } &24\\ \text { Overhead } &\underline{40}\\ \text {Total costs per unit } &\$72\\\end{array}$
An outside supplier offers to provide Epsilon with all the units it needs at $60 per unit. If Epsilon buys from the supplier, the company will still incur 40% of its overhead. Epsilon should choose to:

• A) Buy since the relevant cost to make it is $72.
• B) Make since the relevant cost to make it is $56.
• C) Buy since the relevant cost to make it is $48.
• D) Make since the relevant cost to make it is $48.
• E) Buy since the relevant cost to make it is $56.

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Definitions:

Extraverted

A personality trait characterized by outgoingness, sociability, and a high level of activity and engagement with the external world.

Authoritarian

A leadership or governing style characterized by strict obedience to authority and control over subordinates.

Self-actualization

Self-actualization is the fulfillment of one's talents and potentialities, often considered as a drive or need present in everyone.

Carl Rogers

An influential American psychologist known for his role in developing the humanistic approach to psychology.