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What are the relevant cost for xia to make or buy the part

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Reference no: EM132593857

Xia Co. currently buys a component part for $7 per unit. Xia believes that making the part would require $3.30 per unit of direct materials and $1.05 per unit of direct labor. Xia allocates overhead using a predetermined overhead rate of 225% of direct labor cost. Xia estimates an incremental overhead rate of $0.65 per unit to make the part.

Question 1: What are the relevant cost for Xia to make or buy the part?

Reference no: EM132593857

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