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The Fine Point Company currently produces all of the components for its one product, an electric pencil sharpener. The unit cost of manufacturing the motor for this pencil sharpener is: Direct materials$1.75 Direct labor$1.65 Variable overhead$0.75 Fixed overhead$0.60 The company is considering the possibility of buying this motor from a subcontractor and has been quoted a price of $3.60 per unit. The relevant cost of manufacturing the motor to be considered in reaching the decision is:

Respuesta :

Answer:

$4.15 per unit

Explanation:

The computation of the relevant cost of manufacturing the motor is shown below:

Relevant cost per unit = Direct material per unit + direct labor per unit + variable overhead per unit

= $1.75 + $1.65 + $0.75

= $4.15 per unit

For reaching the decision, we simply added the direct material per unit, direct labor per unit and variable overhead per unit so that the correct answer could arrive

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