Fornelli, Inc.can produce 100 units of a component part with the following costs: $$\begin{array} { l r }
\text { Direct Materials } & \$ 15,000 \
\text { Direct Labor } & 6,500 \
\text { Variable Overhead } & 16,000 \
\text { Fixed Overhead } & 11,000
\end{array}$$
- If Fornelli, Inc.can purchase the units externally for $40,000, by what amount will its total costs change?

Question

Fornelli, Inc.can produce 100 units of a component part with the following costs: $$\begin{array} { l r } 
\text { Direct Materials } & \$ 15,000 \
\text { Direct Labor } & 6,500 \
\text { Variable Overhead } & 16,000 \
\text { Fixed Overhead } & 11,000
\end{array}$$
- If Fornelli, Inc.can purchase the units externally for $40,000, by what amount will its total costs change?

Quizplus · Accepted Answer

The Answer of Fornelli, Inc.can produce 100 units of a component part with the following costs: $$\begin{array} { l r } 
\text { Direct Materials } & \$ 15,000 \
\text { Direct Labor } & 6,500 \
\text { Variable Overhead } & 16,000 \
\text { Fixed Overhead } & 11,000
\end{array}$$
- If Fornelli, Inc.can purchase the units externally for $40,000, by what amount will its total costs change?

Fornelli, Inc - If Fornelli, Inc