Sheffield Industries can produce 600 units of a necessary component part with the following costs: Direct Materials $75900 Direct Labour 20700 Variable Overhead 60300 Fixed Overhead 9700 If Sheffield Industries purchases the component externally, $2800 of the fixed costs can be avoided. Below what minimum external price for the 600 units would Sheffield choose to buy instead of make?   $156900 $96600 $159700 $166600

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Sheffield Industries can produce 600 units of a necessary component part with the following costs:

Direct Materials $75900
Direct Labour 20700
Variable Overhead 60300
Fixed Overhead 9700

If Sheffield Industries purchases the component externally, $2800 of the fixed costs can be avoided. Below what minimum external price for the 600 units would Sheffield choose to buy instead of make?

 

$156900
$96600
$159700
$166600
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