Quiz and is ready to instat LUS tweyo snte riannganse me2e eygandt, Financial St

Question

Quiz and is ready to instat LUS tweyo snte riannganse me2e eygandt, Financial Start Time: 06:38 PM / Remaining: 30 min. RCES Question 1 The cost to produce Part A was $20 per unit in 2016. During 2017, it has increased to $23 per unit. In 2017, Supplier Company has offered to supply Part A for $18 per unit. For the make-or-buy decision, O incremental revenues are $5 per unit. incremental costs are $3 per unit. net relevant costs are $3 per unit. differential costs are $5 per unit. O LINK TO TEXT Study SAVEOR LATER Question Attempts: O of 2 used

Explanation / Answer

Cost to produce = 23 per unit

Cost to purchase = 18 per unit

Differencial cost = Difference between two alternatives = 23 - 18 = 5

The answer is - Differential costs are $5 per unit.

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