Wishnell Toys can make 5,000 toy robots with the following costs: $$\begin{array} { l r }
\text { Direct Materials } & \$ 74,000 \
\text { Direct Labour } & 30,000 \
\text { Variable Overhead } & 23,000 \
\text { Fixed Overhead } & 15,000
\end{array}$$ The company can purchase the 5,000 robots externally for $145,000.The avoidable fixed costs are $15,000 if the units are purchased externally.What is the cost savings if the company makes the robots?
A)$18,000
B)$15,000
C)$5,000
D)$3,000

Question

Wishnell Toys can make 5,000 toy robots with the following costs: $$\begin{array} { l r } 
\text { Direct Materials } & \$ 74,000 \
\text { Direct Labour } & 30,000 \
\text { Variable Overhead } & 23,000 \
\text { Fixed Overhead } & 15,000
\end{array}$$ The company can purchase the 5,000 robots externally for $145,000.The avoidable fixed costs are $15,000 if the units are purchased externally.What is the cost savings if the company makes the robots?
A)$18,000
B)$15,000
C)$5,000
D)$3,000

Quizplus · Accepted Answer

The Answer of Wishnell Toys can make 5,000 toy robots with the following costs: $$\begin{array} { l r } 
\text { Direct Materials } & \$ 74,000 \
\text { Direct Labour } & 30,000 \
\text { Variable Overhead } & 23,000 \
\text { Fixed Overhead } & 15,000
\end{array}$$ The company can purchase the 5,000 robots externally for $145,000.The avoidable fixed costs are $15,000 if the units are purchased externally.What is the cost savings if the company makes the robots?
A)$18,000
B)$15,000
C)$5,000
D)$3,000

Wishnell Toys Can Make 5,000 Toy Robots with the Following