Concord Corporation can produce 100 units of a necessary component part with the following costs: Direct Materials $24000 Direct Labor 8000 Variable Overhead 25000 Fixed Overhead 8000 If Concord Corporation purchases the component externally, $2000 of the fixed costs can be avoided. What is the maximum amount Concord is willing to pay to purchase the 100 units?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Concord Corporation can produce 100 units of a necessary component part with the following costs:

Direct Materials $24000
Direct Labor 8000
Variable Overhead 25000
Fixed Overhead 8000


If Concord Corporation purchases the component externally, $2000 of the fixed costs can be avoided. What is the maximum amount Concord is willing to pay to purchase the 100 units?

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