Question - Make or Buy Terry Inc. manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an offer from a subcontractor to provide 1,800 units of product OP89 for $81,000. If Terry does not purchase these parts from the subcontractor, it must continue to produce them in-house with these costs:
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Costs per Unit
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Direct materials
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$23
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Direct labor
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14
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Variable overhead
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12
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Allocated fixed overhead
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4
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Required: Calculate the relevant cost for producing the product.