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Asked Nov 10, 2019
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Expert Answer

Step 1

Hence, $226,000 is the total cost of making the units. It is obtained by the addition of direct material, direct labor, variable overhead and the fixed overhead.

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Direct material Direct labor Total cost of making the units +Variable overhead + Fixed overhead = $119,000 $24, 000 $53,000 $30,000 =$226,000

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Step 2

Hence, $24,000 is the amount of unavoidable fixed overhead. It is obtained by the subtraction of total fixed overhead and the avoidable fixed overhead.

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(Total Fixed overhead - Unavoidable Fixed overhead = Avoidable Fixed overhead $30,000 $6,000 = $24,000

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Step 3

Hence, the total cost of buying the units is $219,000. It is obtained by the ad...

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Cost of the component + Unavoidab le Total cost of buying the units | Fixed overhead =$195,000 $24,000 =$219,000

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