Pueblo Production Company manufactures 50,000 high-definition televisions each year. Pueblo is considering purchasing the glass screens from an outside source rather than producing them internally. The following data relate to the glass screens:

Should pueblo purchase or produce the screens, and what is the savings accosted with the decision?

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Cost per screen from outside supplier Internal costs per screen Direct materials Direct labor Variable overhead Total fixed overhead Avoidable fixed overhead $32.50 $17.50 $8.25 $2.60 $67,000 $50,400 Cost per screen from outside supplier Internal costs per screen Direct materials Direct labor Variable overhead Total fixed overhead Avoidable fixed overhead $32.50 $17.50 $8.25 $2.60 $67,000 $50,400

Answer rating: 100% (QA)

Make Buy Purchasing cost 1625000 32550000 Direct material ... View the full answer