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Asked Nov 10, 2019
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Expert Answer

Step 1

Fixed Overhead:

Fixed Overhead is a set of costs that do not vary as a result of change in activity. These costs are needed in order to operate a business. Example: Rent, Insurance etc.

Step 2

Following are the calculation of fixed ove...

Cost of buying= Direct Material + Direct Labor + Variable Overhead +Avoidable fixed costs
$47,000 $32,000 $6,000 + $3,000 Avoidable fixed costs
Avoidable fixed costs $6,000
=
Fixed Overhead costs of making = Avoidable fixed costs +unavoidable fixed costs
=$6,000 S2,000
=S8,000
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Cost of buying= Direct Material + Direct Labor + Variable Overhead +Avoidable fixed costs $47,000 $32,000 $6,000 + $3,000 Avoidable fixed costs Avoidable fixed costs $6,000 = Fixed Overhead costs of making = Avoidable fixed costs +unavoidable fixed costs =$6,000 S2,000 =S8,000

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