Question
Bramble Corp. produces 1000 units of a necessary component with the following costs: Direct Materials $28000 Direct Labor 9000 Variable Overhead 12000 Fixed Overhead 10000
Bramble Corp. produces 1000 units of a necessary component with the following costs: Direct Materials $28000 Direct Labor 9000 Variable Overhead 12000 Fixed Overhead 10000 Bramble Corp. could avoid $6000 in fixed overhead costs if it acquires the components externally. If cost minimization is a major consideration and the company would prefer to buy the components, what is the maximum external price that Bramble Corp. would accept to acquire the 1000 units externally? $47000 $55000 $49000 $53000.
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