Reference no: EM132590363

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

Question 1: 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?