Sunday, September 11, 2011

The relevant cost per jar is

ACCOUNTING

Multiple Choice

Melodee’s Preserves currently makes jams and jellies and a variety of decorative jars used for packaging. An outside supplier has offered to supply all of the needed decorative jars. For this make-or-buy decision, a cost analysis revealed the following avoidable unit costs for the decorative jars:



Direct materials $0.25

Direct labor 0.03

Unit-related support costs 0.10

Batch-related support costs 0.12

Product-sustaining support costs 0.22

Facility-sustaining support costs 0.28

Total cost per jar $1.00



The relevant cost per jar is

a. $0.28 per jar.

b. $0.38 per jar.

c. $0.72 per jar.

d. $1.00 per jar.


Click here for the SOLUTION

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