Solution-What is the relevant cost to produce one unit

What is the relevant cost to produce one unit

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Reference no: EM132715602

Galaxy Industries currently manufactures 15,000 components per year and sell these components in the open market $45 per unit. The manufacturing costs of the component were determined to be as follows:

Units produced 15,000 units

Direct materials $150,000
Direct labor $240,000
Variable manufacturing overhead $90,000
Fixed manufacturing overhead $120,000

Problem 1: Galaxy's current manufacturing facilities can produce up to 20,000 units (full capacity) and is currently producing 15,000 components. If Galaxy received a special order offer, what is the relevant cost to produce one unit for the special order?

A. $24/unit

B. $30/unit

C. $32/unit

D. $40/unit

Reference no: EM132715602

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What is the relevant cost to produce one unit

Reference no: EM132715602

Reference no: EM132715602

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