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At what price control unit will incremental manufacturing

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Question - Epsilon Co. can produce a unit of the control unit used in production of its C3BO autonomous vacuum cleaner for the following costs: Direct material $8; Direct labor $24; Overhead $40; Total production costs per unit $72. An outside supplier offers to provide Epsilon with all 20,000 units it needs at $60 per unit. If Epsilon buys from the supplier, the company will still incur 40% of the manufacturing overhead. At what price per unit for the control unit will the incremental manufacturing and the cost of purchasing be equal?

Reference no: EM132530025

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