Epsilon currently pays $74 per unit to buy a part for a product it sells....
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Accounting
Epsilon currently pays $74 per unit to buy a part for a product it sells. Epsilon has excess capacity, and estimates that making the part would incur variable costs of $8 for direct materials and $38 for direct labor. Epsilon's normal predetermined overhead rate is 150% of direct labor cost, but management computes an incremental overhead rate of $15.20 per unit to make this part. Epsilon should choose to: Multiple Choice Buy since the relevant cost to make it is $82 per unit. Make since the relevant cost to make it is $61.20 per unit Buy since the relevant cost to make it is more than $74.00 per unit
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