Ashley Industries can make 1,330 units of a necessary component with the following costs: Direct Materials Direct Labor $146,000 $39,000 Variable Overhead $23,000 Fixed Overhead $? The company can purchase the 1,330 units externally for $287,000. The avoidable fixed costs are $22,000 if the units are purchased externally. An analysis shows that at this external price, the company is indifferent between making or buying the part. What are the fixed overhead costs of making the component?

Ashley Industries can make 1,330 units of a necessary component with the following costs: Direct Materials Direct Labor $146,000 $39,000 Variable Overhead $23,000 Fixed Overhead $? The company can purchase the 1,330 units externally for $287,000. The avoidable fixed costs are $22,000 if the units are purchased externally. An analysis shows that at this external price, the company is indifferent between making or buying the part. What are the fixed overhead costs of making the component?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 3CMA: Aril Industries is a multiproduct company that currently manufactures 30,000 units of Part 730 each...

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