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Temple, Inc. produces several models of clocks. An outside supplier has offered to produce the commercial clocks for Temple for $420 each. Temple needs 1,500 clocks annually. Temple has provided the following unit costs for its commercial clocks: Direct materials                                                         $100 Direct labor                                                                 120 Variable overhead                                                         80 Fixed overhead (40% avoidable)                                 150   Question: The Net cost savings if commercial clocks are produced is ________.

Temple, Inc. produces several models of clocks. An outside supplier has offered to produce the commercial clocks for Temple for $420 each. Temple needs 1,500 clocks annually. Temple has provided the following unit costs for its commercial clocks: Direct materials                                                         $100 Direct labor                                                                 120 Variable overhead                                                         80 Fixed overhead (40% avoidable)                                 150   Question: The Net cost savings if commercial clocks are produced is ________.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Temple, Inc. produces several models of clocks. An outside supplier has offered to produce the commercial clocks for Temple for $420 each. Temple needs 1,500 clocks annually. Temple has provided the following unit costs for its commercial clocks:

Direct materials                                                         $100

Direct labor                                                                 120

Variable overhead                                                         80

Fixed overhead (40% avoidable)                                 150

 

Question:

The Net cost savings if commercial clocks are produced is ________.

 

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