Wishnell Toys can make 1,000 toy robots with the following costs: Direct Materia

Question

Wishnell 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?(Points : 4) $1,000
$5,000
$10,000
$4,000 Wishnell 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?(Points : 4)

Explanation / Answer

1000

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