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1 Edwardo Compeny is presently making a part that is used in one of...

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Accounting

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1 Edwardo Compeny is presently making a part that is used in one of its products. The unit product cost is: Direct materials 59 Direct labour 5 Variable manufacturing overhead. Depreciation of special equipment Supervisor's salary 2 General factory overhead* 10 Total unit product cost. 93.0 + The special equipment has no resale value. Common costs are allocated on the basis of direct labour hours. The costs above are based on 20,000 parts produced each year. An outside supplier has offered to provide the 20,000 parts for only $25 per part. None of the general factory overhead costs will be seved if the parts are purchased from the outside; these costs would be reallocated to other items made by the company. Required: Compute the total relevant costs of 20,000 units. Should this offer be accepted? **

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