FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Waterway Music produces 59300 blank CDs on which to record music. The CDs have the following costs:
Waterway could avoid $3900 in fixed overhead costs if it acquires the CDs externally. If cost minimization is the major consideration and the company would prefer to buy the 59300 units externally, what is the maximum external price that Waterway would expect to pay for the units?
Direct Materials | $11000 |
Direct Labour | 14200 |
Variable |
2900 |
Fixed Overhead | 7500 |
Waterway could avoid $3900 in fixed overhead costs if it acquires the CDs externally. If cost minimization is the major consideration and the company would prefer to buy the 59300 units externally, what is the maximum external price that Waterway would expect to pay for the units?
$35600
$31700
$32000
$28100
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