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Holt Pty Ltd presently makes 20 000 units of a certain part to use in...

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Accounting

Holt Pty Ltd presently makes 20 000 units of a certain part to use in production. The cost to make the part is $20 per unit including $15 in variable costs and $5 in fixed overhead applied. If Holt buys the part from Bricker, the cost would be $18 per unit and the released facilities could not be used for any other activity. Eighty per cent of the fixed overhead would continue. Determine the relevant costs to make the part.

Select one: a. $380 000 b. $300 000 c. $320 000 d. $360 000

Please explain why choose C.

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