Beta Inc Can Produce a Unit of Zed for the Following

question 66

Multiple Choice

Beta Inc. can produce a unit of Zed for the following costs:
$$\begin{array} { l r } \text { Direct material } & \$ 10 \\\text { Direct labor } & 20 \\\text { Overhead } & \underline{50} \\\text { Total costs per unit } & \underline { \$ 80 }\end{array}$$
An outside supplier offers to provide Beta with all the Zed units it needs at $58 per unit. If Beta buys from the supplier, they will still incur 40% of its overhead. Beta should:

• A) Buy Zed since the relevant cost to make it is $60.
• B) Make Zed since the relevant cost to make it is $60.
• C) Buy Zed since the relevant cost to make it is $80.
• D) Make Zed since the relevant cost to make it is $30.
• E) Buy Zed since the relevant cost to make it is $30.

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Definitions:

Rental Income

Income generated from renting out property or other assets to tenants.

Cash Inflow

Money entering a business from various sources such as operations, financing activities, and investing activities, contributing to the overall cash balance.

Operating Activities

Operating Activities involve the primary activities a company engages in to generate income, including production, sales, and delivery of its product or service.

Investing Activities

Transactions related to buying or selling long-term assets and investments other than cash equivalents.