Z Company manufactures a component part with the following standard costs: Direct Materials P 6.00 Direct Labor 15.00 Factory Overhead 60.00 Standard cost per unit P81.00 Factory overhead is applied at P2.00 per standard direct labor hour. Thirty (30%) of the applied FOH cost is fixed and is not affected by any make or buy decision. The component part can be purchased from outside suppliers at P73.00 per unit. Question: In the decision to "make or buy", what is the total relevant manufacturing cost? P81.00 P63.00 OP73.00 OP39.00

Z Company manufactures a component part with the following standard costs: Direct Materials P 6.00 Direct Labor 15.00 Factory Overhead 60.00 Standard cost per unit P81.00 Factory overhead is applied at P2.00 per standard direct labor hour. Thirty (30%) of the applied FOH cost is fixed and is not affected by any make or buy decision. The component part can be purchased from outside suppliers at P73.00 per unit. Question: In the decision to "make or buy", what is the total relevant manufacturing cost? P81.00 P63.00 OP73.00 OP39.00

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...

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