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Schmidt Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units
Schmidt Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows:
Direct materials | $45,000 |
Direct labour | 35,000 |
Variable factory overhead | 30,000 |
Fixed factory overhead | 70,000 |
Total costs | $180,000 |
Of the fixed factory overhead costs, $30,000 is avoidable.
- Assuming no other use of their facilities, the highest price that Schmidt should be willing to pay for 10,000 units of the part is
- $210,000.
- $160,000.
- $150,000.
- $220,000.
- $140,000.
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