Alpha CoCan Produce a Unit of Beta for the Following Costs

question 91

Multiple Choice

Alpha Co.can produce a unit of Beta for the following costs:
$\begin{array}{l}\text { Direct material } & \$8 \\\text { Direct labor } & 24 \\\text { Overhead } &\underline { 40} \\\text { Total costs per unit } & \underline { \$72}\end{array}$

An outside supplier offers to provide Alpha with all the Beta units it needs at $60 per unit.If Alpha buys from the supplier, Alpha will still incur 40% of its overhead.Alpha should:

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

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Definitions:

Peripheral Vision

The part of vision that occurs outside the very center of gaze, allowing humans to perceive objects and movement outside of the direct line of sight.

Cones

Photoreceptor cells in the retina of the eye that function best in bright light and enable color vision.

Blind Spot

An area in the visual field that lacks detection due to the absence of photoreceptor cells in the optic disc of the retina.

Brain

The organ in the head of an organism that controls its actions, thoughts, feelings, and interactions with the environment.