The Alliance For Global Education Operations And Supply Chain Management Assignment Help - An outside supplier

Question - Alpha Co. can produce a unit of Beta for the following costs:
Direct material $8
Direct labor 24
Overhead 40
Total costs per unit $72

An outside supplier offers to provide Alpha with all the Beta units it needs at $60 per unit. If Alpha
buys from the supplier, Alpha will still incur 40% of its overhead. Alpha should:
Buy Beta since the relevant cost to make it is $72.
Make Beta since the relevant cost to make it is $56.
Buy Beta since the relevant cost to make it is $48.
Make Beta since the relevant cost to make it is $48.
Buy Beta since the relevant cost to make it is $56.

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