Pueblo Production Company manufactures 50000 high-definition televisions each year. Pueblo is considering purchasing the glass screens from an outside source rather than producing them internally. The following data relate to the glass screens: Cost per screen from outside supplier $32.5 Internal costs per screen Direct materials 17.5 Direct labor 8.25 Variable overhead 2.6 Total fixed overhead 67000 Avoidable fixed overhead 50400 Should Pueblo purchase or produce the screens, and what is the savings associated with the decision? (a) Purchase the screens and save $157100. (b) Produce the screens and save $157100. (c) Produce the screens and save $207500. (d) Purchase the screens and save $207500.
Pueblo Production Company manufactures 50000 high-definition televisions each year. Pueblo is considering purchasing the glass screens from an outside source rather than producing them internally. The following data relate to the glass screens: Cost per screen from outside supplier $32.5 Internal costs per screen Direct materials 17.5 Direct labor 8.25 Variable overhead 2.6 Total fixed overhead 67000 Avoidable fixed overhead 50400 Should Pueblo purchase or produce the screens, and what is the savings associated with the decision? (a) Purchase the screens and save $157100. (b) Produce the screens and save $157100. (c) Produce the screens and save $207500. (d) Purchase the screens and save $207500.
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Pueblo Production Company manufactures 50000 high-definition televisions each year. Pueblo is considering purchasing the glass screens from an outside source rather than producing them internally. The following data relate to the glass screens:
| Cost per screen from outside supplier |
$32.5 |
| Internal costs per screen | |
| Direct materials |
17.5 |
| Direct labor |
8.25 |
| Variable overhead |
2.6 |
| Total fixed overhead |
67000 |
| Avoidable fixed overhead |
50400 |
Should Pueblo purchase or produce the screens, and what is the savings associated with the decision?
(a) Purchase the screens and save $157100.
(b) Produce the screens and save $157100.
(c) Produce the screens and save $207500.
(d) Purchase the screens and save $207500.
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