This is a practice question and I am not sure how they derived at the avoidable annual fixed factory overhead.

Uale Help Me Solve This Sunshine State Company Cost of Making 17.5-Ounce Bottles Assume that Nantucket Nectars reports the following costs to make 17.5 oz. bottles for its Juice Cocktails: Total Cost for Cost per E: (Click the icon to view the costs.) 900,000 Bottles Bottle $ 0.075 Another manufacturer offers to sell Nantucket Nectars the bottles for $0.25. The capacity now used to make bo company purchases the bottles. Further, one supervisor with a salary of $60,000, a fixed cost, would be elimina purchased. Direct materials Direct labor 67,500 $ 39,600 0.044 Variable factory overhead 62,100 0.069 0.081 Fixed factory overhead 72.900 242,100 $ $ 0.269 EA Total Requirement 1. Prepare a schedule that compares the costs to make and buy the 17.5 oz. bottles. Should Nantucket Nectar (Round the cost per bottle to three decimal places.) Purchase cost 234,000 $ 0.260 Direct materials $ 67,500 $ 0.075 Direct labor 39,600 0.044 Variable factory overhead 62,100 0.069 Avoidable annual fixed factory overhead 50,000 0.056 Total relevant costs $ 219,200 $ 0.244 $ 234,000 $ 0.260 Print Done Using the total relevant cost amounts from the preceding step, calculate the cost savings or additional costs that Sunshine State would incur from buying the bottles from the manufacturer. (Use a minus sign or parentheses to show "Additional cost".) Enter any number in the edit fields and then click Check Answer. ? 1 Skip Ahead part remaining Clear All Check Answer Close