Question
WGA 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
WGA 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 labor 65,000 Variable overhead 30,000 Fixed overhead 70,000 Total Cost $210,000 Of the fixed overhead costs, $30,000 is avoidable. A supplier has offered to sell 10,000 units of the same part to WGA for $18 per unit. Calculate the total margin cost and average fixed cost.
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