What is the maximum external price that sandhill would be

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Question: Sandhill Music produces 60000 CDs on which to record music. The CDs have the following costs:

Direct Materials	$18000
Direct Labor	20000
Variable Overhead	4500
Fixed Overhead	7000

None of Sandhill's fixed overhead costs can be reduced, but another product could be made that would increase profit contribution by $4000 if the CDs were acquired externally. If cost minimization is the major consideration and the company would prefer to buy the CDs, what is the maximum external price that Sandhill would be willing to accept to acquire the 60000 units externally?

Reference no: EM133433310

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