Bell's Shop Can Make 1,000 Units of a Necessary Component

question 109

Multiple Choice

Bell's Shop can make 1,000 units of a necessary component with the following costs: $$\begin{array} { l r } \text { Direct Materials } & \$ 24,000 \\\text { Direct Labor } & 6,000 \\\text { Variable Overhead } & 3,000 \\\text { Fixed Overhead } & ?\end{array}$$ The company can purchase the 1,000 units externally for $39,000. The unavoidable fixed costs are $2,000 if the units are purchased externally. An analysis shows that at this external price, the company is indifferent between making or buying the part. What are the fixed overhead costs of making the component?

• A) $8,000
• B) $6,000
• C) $4,000
• D) Cannot be determined.

---

Definitions:

Network Resources

Various assets accessible within a computer network, including data, storage, devices, and computational power.

Input

Data or signals that are provided to a system or device for processing.

Commands

Instructions or directives given by a user to a computer or software application to perform a specific task or operation.

Messages

Pieces of communication or information conveyed from one person or entity to another.