QUESTION 12

Texs Manufacturing Company can make 100 units of a necessary component part with the following costs:

Direct Materials $120,000

Direct Labor 25,000

Variable Overhead 45,000

Fixed Overhead 30,000

If Texs Manufacturing Company purchases the component externally, $20,000 of the fixed costs can be avoided. At what external price for the 100 units is the company indifferent between making or buying?

$190,000

$210,000

$200,000

$220,000