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

question 119

Multiple Choice

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

---

Definitions:

Hydromorphone

A powerful opioid analgesic medication used to alleviate severe pain by acting on the central nervous system.

Naloxone

A medication used to block the effects of opioids, especially in overdose.

Respiratory Rate

The frequency at which an individual inhales and exhales air within a minute, essential for evaluating respiratory health.

Chronic Pain

Persistent pain that continues for extended periods of time, typically longer than 3 months, and may not respond to standard treatment.