Oriole Production Company manufactures 50500 high-definition televisions each year. Oriole is considering purchasing the glass screens from an outside source rather than producing them internally. The following data relate to the glass screens: Cost per screen from outside supplier Internal costs per screen Direct materials $32.50 17.50 Direct labor Variable overhead Total fixed overhead Avoidable fixed overhead 8.25 2.60 67500 50900 Should Oriole purchase or produce the screens, and what is the savings associated with the decision? O Purchase the screens and save $209575. Produce the screens and save $158675. O Produce the screens and save $209575. O Purchase the screens and save $158675. SUPPORT
Oriole Production Company manufactures 50500 high-definition televisions each year. Oriole is considering purchasing the glass screens from an outside source rather than producing them internally. The following data relate to the glass screens: Cost per screen from outside supplier Internal costs per screen Direct materials $32.50 17.50 Direct labor Variable overhead Total fixed overhead Avoidable fixed overhead 8.25 2.60 67500 50900 Should Oriole purchase or produce the screens, and what is the savings associated with the decision? O Purchase the screens and save $209575. Produce the screens and save $158675. O Produce the screens and save $209575. O Purchase the screens and save $158675. SUPPORT
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Oriole Production Company manufactures 50500 high-definition televisions each year. Oriole is
considering purchasing the glass screens from an outside source rather than producing them internally.
The following data relate to the glass screens:
Cost per screen from outside supplier
Internal costs per screen
Direct materials
$32.50
17.50
Direct labor
Variable overhead
Total fixed overhead
Avoidable fixed overhead
8.25
2.60
67500
50900
Should Oriole purchase or produce the screens, and what is the savings associated with the decision?
O Purchase the screens and save $209575.
Produce the screens and save $158675.
O Produce the screens and save $209575.
O Purchase the screens and save $158675.
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