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If Tex's Manufacturing Company purchases the component externally, $20,000 of the fixed costs can be avoided. At what external price for the 100 units is the company indifferent between making or buying

Respuesta :

Answer:

$210,000

Explanation:

The computation of the external price is shown below

Making cost =  buying  cost

$120,000 + $25,000 + $45,000 + $30,000) = external price + Unavoidable fixed cost (30,000-20,000)

$220,000 = External price + $10,000

So,

External price = 210,000

Hence, the same is to be considered

Therefore the external price is $210,000

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