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beta incorporated can produce a unit of zed for the following costs: direct materials, $10; direct labor $20; and incremental overhead, $30. an outside supplier offers to provide beta with all of the zed units it needs at $58 per unit. beta incorporated should:

Answer :

Beta incorporated should: Buy zed since the relevant cost to make it is $60.

Beta:
Beta (β) is a degree of the volatility—or systematic threat—of a safety or portfolio in comparison to the marketplace as a whole (commonly the S&P 500). Stocks with betas better than 1.zero may be interpreted as greater risky than the S&P 500.Beta is utilized in the capital asset pricing model (CAPM), which describes the connection among systematic threat and predicted go back for belongings (commonly stocks). CAPM is broadly used as a technique for pricing volatile securities and for producing estimates of the predicted returns of belongings, thinking about each the threat of these belongings and the price of capital.
The following is the calculation of relevant cost to make ZED. direct material $10 direct labor $20 overhead (only 60% relevant, since 40% is incurred anytime) $30total relevant cost $60since the seller is offering the product at $58, it should be bought.


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