The Manager at Frame Manufacturing Reported the Cost to Product

Multiple Choice

The manager at Frame Manufacturing reported the cost to product Frame A was $22 per unit in 2011 and in 2012 the cost increased to $24 per unit.In 2013,the manager at a local supplier offered to supply Frame A for $20 per unit.For the make-or-buy decision:

A) incremental revenues are $4 per unit.
B) incremental costs are $2 per unit.
C) net relevant costs are $2 per unit.
D) differential costs are $4 per unit.
E) None of these are correct.