Question

An outside supplier offers to provide Factor with all the units it needs at $44.45 per unit. If Factor buys from the supplier, the company will still incur 70% of its overhead. Factor should choose to:

Answer 1

Factor must opt to agree as well as purchase the deal from the provider. A further explanation is provided below.

Step-by-step explanation:

The given problem seems to be incomplete. Find the attachment of the complete question below.

Given:

Direct material,

= $8.70

Direct labor,

= 24.70

Overhead,

= 43.50

Now,

If the offer is accepted, the cost per unit will be:

=
`44.45 + (43.50* 70 \ percentage)`

=
`44.45 + 30.45`

=
`74.90` ($)

Thus the above is the correct answer.