Impala is currently producing 100 units of a necessary what, Accounting Basics

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Impala is currently producing 100 units of a necessary what

Problem

Impala is currently producing 100 units of a necessary component part by incurring $42,000 in direct materials, $8,750 in direct labor, $15,750 in variable overhead, and $10,500 in fixed overhead. If Impala purchases the component externally, $7,000 of fixed costs can be avoided. What is the external price for 100 units at which the company is indifferent between buying and selling?

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Accounting Basics: Impala is currently producing 100 units of a necessary what

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