A company makes three components, L, M and N. The costs of the components are as follows:

Component L

Component M

Component N

Variable cost

5.00

16.00

10.00

Fixed cost

4.00

16.60

7.50

Total unit cost

9.00

32.60

17.50

The fixed costs per unit are an allocation of general fixed overheads.

A supplier has offered to supply the components at the following prices:

Component L8

Component M14

Component N11

Which components should the company buy in?

Select one:

A.Components L and N

B.Component M

C.None of the components

D.All of the components