The company can purchase the 1000 units externally for

Reference no: EM13596143

Bell's Shop can make 1,000 units of a necessary component with the following costs:

Direct Materials $72,000
Direct Labor 18,000
Variable Overhead 9,000
Fixed Overhead ?

The company can purchase the 1,000 units externally for $117,000. The avoidable fixed costs are $6,000 if the units are purchased externally. An analysis shows that at this external price, the company is indifferent between making or buying the part. What are the fixed overhead costs of making the component?

Reference no: EM13596143

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