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Question - Concord Music produces 60500 blank CDs on which to record music. The CDs have the following costs:
Direct Materials $11500
Direct Labour 15500
Variable Overhead 2700
Fixed Overhead 7500
Concord could avoid $4000 in fixed overhead costs if it acquires the CDs externally. If cost minimization is the major consideration and the company would prefer to buy the 60500 units externally, what is the maximum external price that Concord would expect to pay for the units?
The main objective of Bob Reep is acquiring a lease that would potentially minimize the monthly cost of meeting trucking requirements for a new project without dismissing off the employees i.e. following his no-layoff policy and using personal driver..
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