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What is the cost savings if the company makes the robots

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Reference no: EM133090099

Question - Well-done toys can make 1,000 toy robots with the following costs:

Direct Materials $70,000

Direct Labor 26,000

Variable Overhead 15,000

Fixed Overhead 15,000

The company can purchase the 1,000 robots externally for $120,000. The avoidable fixed costs are $5,000 if the units are purchased externally. What is the cost savings if the company makes the robots?

(a) $10,000

(b) $4,000

(c) $5,000

(d) $1,000

Reference no: EM133090099

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