$$\text { Use the following information for questions } 37 - 38 \text {. }$$

question 32

Multiple Choice

$$\text { Use the following information for questions } 37 - 38 \text {. }$$
Eminen Music produces 60,000 blank CDs on which to record music.The CDs have the following costs:
$$\begin{array} { l l } \text { Direct Materials } & \$ 11,000 \\\text { Direct Labour } & 15,000 \\\text { Variable Overhead } & \mathbf { 3 } , 000 \\\text { Fixed Overhead } & 7,000\end{array}$$
-Eminem could avoid $4,000 in fixed overhead costs if it acquires the CDs externally.If cost minimization is the major consideration and the company would prefer to buy the 60,000 units externally, what is the maximum external price that Eminem would expect to pay for the units?

• A)$32,000
• B)$29,000
• C)$36,000
• D)$33,000

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Definitions:

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Legal rules established by government bodies intended to control and supervise certain activities or behaviors within a society.

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The process by which corporate executives, managers, and other leaders direct, control, and organize work tasks and company resources to achieve specific goals.