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Skysong Systems produces and sells speakers and CD players. The following information has been collected about the costs related to the systems: Selling price
Skysong Systems produces and sells speakers and CD players. The following information has been collected about the costs related to the systems: Selling price per unit Production costs per unit $74 Direct materials Direct labour Variable overhead Total fixed overhead $25 16 2 $331,540 Skysong normally produces 24,200 of these systems per year. The managers have recently received an offer from a Mexican company to produce these systems for $51 each. The managers estimate that $237,160 of Skysong's fixed costs could be eliminated if they accept the offer.
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