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Toys Inc. can make 5,000 toy robots with the following costs. Direct Materials $74,000 Direct Labour 30,000 Variable Overhead 20,000 Fixed Overhead 15,000 The company
Toys Inc. can make 5,000 toy robots with the following costs.
Direct Materials $74,000
Direct Labour 30,000
Variable Overhead 20,000
Fixed Overhead 15,000
The company can purchase the 5,000 robots externaly for $145, 000. The avoidable fixed costs are $15,000 if the units are purchased externally, What is the cost savings if the company makes the robots?
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