Blue Spruce Tech produces 60000 iPhone adapters with the following costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $8000 O $34000 $32500 $38500 $43000 15500 4500 10500 None of Blue Spruce's fixed overhead costs can be reduced, but another product could be made that would increase profit by $4500 if the adapters were acquired externally. If cost minimization is the major consideration and the company would prefer to buy the adapters, what is the maximum external price that Blue Spruce would be willing to accept to acquire the 60000 units externally?

Blue Spruce Tech produces 60000 iPhone adapters with the following costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $8000 O $34000 $32500 $38500 $43000 15500 4500 10500 None of Blue Spruce's fixed overhead costs can be reduced, but another product could be made that would increase profit by $4500 if the adapters were acquired externally. If cost minimization is the major consideration and the company would prefer to buy the adapters, what is the maximum external price that Blue Spruce would be willing to accept to acquire the 60000 units externally?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 7EA: Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per...

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