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:
Cost per screen from outside supplier | $32.50 |
Internal costs per screen: | |
Direct materials | 17.50 |
Direct labor | 8.25 |
Variable overhead | 2.60 |
Total fixed overhead | 67,000 |
Avoidable fixed overhead | 50,400 |
What is the total relevant cost to internally produce 50,000 glass screens?
◦ $1,484,500
◦ $1,625,000
◦ $1,417,500
◦ $1,467,900