Ruth company could avoid 3000 in fixed overhead costs if it

Reference no: EM13594675

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: EM13594675

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