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Question - The following standard costs pertain to a component part manufactured by Ashby Company: Direct materials $2
Direct labor 5
Factory overhead 20
Standard cost per unit $27
Factory overhead is applied at $1 per standard machine hour. Fixed capacity cost is 60% of applied factory overhead, and is not affected by a make or buy; decision. It would cost $25 per unit to buy the part from an outside supplier. In the decision to make or buy, what is the total relevant unit manufacturing cost to be considered?
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