Answer to Question #56608 in Other Economics for Noja
Cost information on internal production includes the following:
Total Cost Unit Cost
Direct materials 10,000 1.00
Direct labour 20,000 2.00
Variable overheads 8,000 0.80
Fixed overheads 44,000 4.40
Total 82,000 8.20
Fixed overhead will continue whether the component is produced internally or externally. No additional costs of purchasing will be incurred beyond the purchase price.
a) List the relevant cost of internal production and external purchase.
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