Green Manufacturing Makes 30,000 Units Per Year of a Part

Multiple Choice

Green Manufacturing makes 30,000 units per year of a part used in the manufacture of its new camcorder. An outside supplier has offered to sell Green the part for $48 a unit. If the part was purchased from the supplier, all of the direct labor costs would be avoided as well as $5 of the manufacturing overhead cost per unit. Product cost information for the part under review is as follows:
$\begin{array}{lr}\text { Direct Materials}&\$18\\\text { Direct Labor}&\$24\\\text { Manufacturing overhead}&\$16\\\text { Unit product cost}&\$58\\\end{array}$

How much of the unit product cost is relevant in the decision of whether to make or buy the part?

A) $58.
B) $42.
C) $47.
D) $40.