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Aholt Company makes 40,000 units per year of a part that it uses in the products it manufactures. The unit product cost of this part is computed as follows:
Direct Materials $11.30
Direct Labour $22.70
Variable Manufacturing Overhead $1.20
Fixed Manufacturing Overhead $24.70
Unit Product Cost $59.90
Problem 1: How much of the unit product cost of $59.90 is relevant in the decision of whether to make or buy the part?
A) $59.90.
B) $35.20.
C) $38.00.
D) $22.70.
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