Swifty Corporation can produce 100 units of a necessary component part with the following costs: Direct Materials $24000 Direct Labor 13000 Variable Overhead 30000 Fixed Overhead 12000 If Swifty Corporation purchases the component externally, $3500 of the fixed costs can be avoided. Below what external price for the 100 units would Swifty choose to buy instead of make the units? $70500 $75500 $58500 $67000

Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter15: Introduction To Managerial Accounting
Section: Chapter Questions
Problem 3CMA: A firm has 100,000 in direct materials costs, 50,000 in direct labor costs, and 80,000 in overhead....
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Swifty Corporation can produce 100 units of a necessary component part with the following costs:

Direct Materials $24000
Direct Labor 13000
Variable Overhead 30000
Fixed Overhead 12000


If Swifty Corporation purchases the component externally, $3500 of the fixed costs can be avoided. Below what external price for the 100 units would Swifty choose to buy instead of make the units?

$70500
$75500
$58500
$67000 
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