Peter Co.makes and uses 5,000 components each year in its manufacturing operations.An outside supplier has offered to supply the components to Peter at $66 per unit.Peter's production costs are as follows: If Peter accepts the order,$8 of fixed overhead per unit will be eliminated.
What is the per unit relevant cost of producing the product in this decision?
A)$86
B)$52
C)$78
D)$60

Question

Peter Co.makes and uses 5,000 components each year in its manufacturing operations.An outside supplier has offered to supply the components to Peter at $66 per unit.Peter's production costs are as follows:  If Peter accepts the order,$8 of fixed overhead per unit will be eliminated.
What is the per unit relevant cost of producing the product in this decision?
A)$86 
B)$52 
C)$78 
D)$60

Quizplus · Accepted Answer

The Answer of Peter Co.makes and uses 5,000 components each year in its manufacturing operations.An outside supplier has offered to supply the components to Peter at $66 per unit.Peter's production costs are as follows:  If Peter accepts the order,$8 of fixed overhead per unit will be eliminated.
What is the per unit relevant cost of producing the product in this decision?
A)$86 
B)$52 
C)$78 
D)$60

Peter CoMakes and Uses 5,000 Components Each Year in Its Manufacturing