Question
Galley Industries can produce 100 units of a necessary component part with the following costs: Direct Materials $20,000 Direct Labor 9,000 Variable Overhead 21,000 Fixed
Galley Industries can produce 100 units of a necessary component part with the following costs:
Direct Materials $20,000
Direct Labor 9,000
Variable Overhead 21,000
Fixed Overhead 8,000
If Galley Industries purchases the component externally, $3,000 of the fixed costs can be avoided. Below what external price for the 100 units would Galley choose to buy instead of make?
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, George Foster, Srikant M. Datar, Howard D. Teall, Foster Horngren, Data Horngren
3rd Canadian Edition
0130355801, 978-0130355805
