Bonita's Shop can make 1000 units of a necessary component with the following costs: Direct Materials $32000 Direct Labor 6000 Variable Overhead Fixed Overhead 3000 The company can purchase the 1000 units externally for $47000. The unavoidable fixed costs are $2000 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 foxed overhead costs of making the component? O $8000 O $4000 O Cannot be determined O $6000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Only typing answer

Please answer explaining in detail step by step without table and graph thankyou 

Bonita's Shop can make 1000 units of a necessary component with the following costs:
Direct Materials
Direct Labor
Variable
Overhead
Fixed Overhead
$32000
6000
3000
The company can purchase the 1000 units externally for $47000. The unavoidable fixed costs are $2000 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
foxed overhead costs of making the component?
O $8000
O $4000
O Cannot be determined
O $6000
Transcribed Image Text:Bonita's Shop can make 1000 units of a necessary component with the following costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $32000 6000 3000 The company can purchase the 1000 units externally for $47000. The unavoidable fixed costs are $2000 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 foxed overhead costs of making the component? O $8000 O $4000 O Cannot be determined O $6000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Relevant cost analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education