Homework Answers
Relevant incremental cost of making each unit:
| Direct labor per unit | $4 |
| Direct material per unit | 1 |
| Total relevant cost per unit | 5 |
| Less: Cost charged by supplier ($6,000/1,000) | 6 |
| Total relevant incremenatl cost per unit | $1 |
Relevant incremental cost of making each unit = $1 per unit
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