Epsilon Co. can produce a unit of product for the following costs: Direct material$8 Direct labor 24 Overhead 40 Total product costs per unit$72 An outside supplier offers to provide Epsilon with all the units it needs at $60 per unit. If Epsilon buys from the supplier, the company will still incur 40% of its overhead. Epsilon should choose to:
A. Make since the relevant cost to make it is $48.
B. Buy since the relevant cost to make it is $56.
C. Buy since the relevant cost to make it is $48.
D. Buy since the relevant cost to make it is $72.
E. Make since the relevant cost to make it is $56.
Answer: E
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