Maximum price olive corp should pay to the outside supplier

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Reference no: EM13790669

Olive corp currently makes 20,000 sub components a year in one of its factories. the unit costs produced are:

Direct materials: $12,

Direct labor: 8,

Var. manufacturing overhead: 12,

fixed manuf. overhead: 8,

total unit costs: $40.

An outside supplier has offered to provide olive corp with the 20,000 subcom. at a $36 per unit price. Fixed overhead is not avoidable. What is the maximum price olive corp should pay to the outside supplier

Reference no: EM13790669

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