Ford Company manufactures a part for its production cycle. The costs per unit for 10,000 units of the part are as follows: Direct materials $20.00 Direct labor 15.00 Variable factory overhead 16.00 Fixed factory overhead 15.00 Total costs $66.00 The fixed factory overhead costs are unavoidable. Assuming no other use for the facilities, what is the highest price that Ford Company should be willing to pay for the part? O$35 $51 $45 $41

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Ford Company manufactures a part for its production cycle. The costs per unit for 10,000
units of the part are as follows:
Direct materials $20.00
Direct labor 15.00
Variable factory overhead 16.00
Fixed factory overhead 15.00
Total costs $66.00
The fixed factory overhead costs are unavoidable. Assuming no other use for the facilities,
what is the highest price that Ford Company should be willing to pay for the part?
$35
$51
O$45
$41
Transcribed Image Text:Ford Company manufactures a part for its production cycle. The costs per unit for 10,000 units of the part are as follows: Direct materials $20.00 Direct labor 15.00 Variable factory overhead 16.00 Fixed factory overhead 15.00 Total costs $66.00 The fixed factory overhead costs are unavoidable. Assuming no other use for the facilities, what is the highest price that Ford Company should be willing to pay for the part? $35 $51 O$45 $41
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