Factor Co Can Produce a Unit of Product for the Following

Multiple Choice

Factor Co. can produce a unit of product for the following costs: $\begin{array}{llr} \text { Direct material} &\$8\\ \text { Direct labor} &24\\ \text { Overhead } &40\\ \text {Total costs per unit } &\$72\end{array}$

An outside supplier offers to provide Factor with all the units it needs at $46 per unit. If Factor buys from the supplier, the company will still incur 60% of its overhead. Factor should choose to:

A) Buy since the relevant cost to make it is $48.
B) Buy since the relevant cost to make it is $32.
C) Buy since the relevant cost to make it is $56.
D) Make since the relevant cost to make it is $48.
E) Make since the relevant cost to make it is $32.