If cost minimization is the major consideration and the

Reference no: EM13598370

Ruth Company produces 1,000 units of a necessary component with the following costs:

Direct Materials..................................$24,000
Direct Labor........................................16,000
Variable Overhead..................................4,000
Fixed Overhead......................................7,000

Ruth Company could avoid $3,000 in fixed overhead costs if it acquires the components externally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Ruth Company would accept to acquire the 1,000 units externally?

Reference no: EM13598370

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