Crigui Music produces 60,000 CDs on which to record music. The CDs have the following costs:
Direct Materials $11,000
Direct Labor 15,000
Variable Overhead 3,000
Fixed Overhead 7,000
Crigui could avoid $4,000 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 60,000 units externally, what is the maximum external price that Crigui would expect to pay for the units?
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Home » Business » Crigui Music produces 60,000 CDs on which to record music. The CDs have the following costs: Direct Materials $11,000 Direct Labor 15,000 Variable Overhead 3,000 Fixed Overhead 7,000 Crigui could avoid $4,000 in fixed overhead costs if it acquires