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:

Answer rating: 100% (QA)

Calculate relevant cost of manufacturing Direct material p... View the full answer