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Bramble Music produces 59500 blank CDs on which to record music. The CDs have the following costs: Direct Materials $11700 Direct Labour 15800 Variable Overhead
Bramble Music produces 59500 blank CDs on which to record music. The CDs have the following costs:
Direct Materials | $11700 |
Direct Labour | 15800 |
Variable Overhead | 3200 |
Fixed Overhead | 6600 |
None of Brambles fixed overhead costs can be reduced, but another product could be made that would increase profit contribution by $4300 if the CDs were acquired externally. If cost minimization is the major consideration and the company would prefer to buy the CDs, what is the maximum external price that Bramble would be willing to accept to acquire the 59500 units externally?
| $37300 |
| $33000 |
| $35000 |
| $41600 |
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