Question

In addition to the above costs, if Quirch produces part PQ107, it would have a retooling and design cost of $9,800. The relevant costs of producing 2,400 units of product PQ107 internally are:

Answer 1

$149,000

Step-by-step explanation:

Computation for the relevant costs of producing 2,400 units of product PQ107 internally

Using this formula

Relevant Costs = Incremental Costs = Incremental Variable Costs + Incremental

Let plug in the formula

Relevant Costs = [(2,400 units × $31/unit) + (2,400 units × $19/unit) + (2,400 units × $8/unit)] + $9,800

Relevant Costs=$74,400+$45,600+$19,200+$9,800

Relevant Cost =$149,000

Therefore the relevant costs of producing 2,400 units of product PQ107 internally are $149,000