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Crane Music produces 59500 blank CDs on which to record music. The CDs have the following costs: Direct Materials $11800 Direct Labour 15600 Variable Overhead
Crane Music produces 59500 blank CDs on which to record music. The CDs have the following costs:
Direct Materials | $11800 |
Direct Labour | 15600 |
Variable Overhead | 3400 |
Fixed Overhead | 6800 |
Crane could avoid $3700 in fixed overhead costs if it acquires the CDs externally. If cost minimization is the major consideration and the company would prefer to buy the 59500 units externally, what is the maximum external price that Crane would expect to pay for the units?
$30800
$33900
$37600
$34500
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