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How much can cwb corp save in total

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Question - CWB Corp. produces the lightbulb that is used in the manufacture of one of its products. At the production level of 5,000 units, its cost information is listed as below.

Direct materials per unit $2

Direct labour per unit $4

Variable manufacturing overhead per unit $3

Fixed manufacturing overhead per unit $1

Total manufacturing cost per unit $10

Redbird Inc. has offered to sell 5,000 units of the same lightbulb for $11.47 per unit. Assume that CWB Corp. can save $2,064 in the total fixed manufacturing overhead cost if it outsources the lightbulb production to Redbird Inc. Compared to buying the lightbulbs from the outside supplier Redbird Inc., how much can CWB Corp. save in total by making the lightbulbs internally?

Reference no: EM133152059

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