Tex’s Manufacturing Company can make 100 units of a necessary component part with the following costs:
Direct Materials $120,000
Direct Labor 25,000
Variable Overhead 45,000
Fixed Overhead 30,000
If Tex’s Manufacturing Company purchases the component externally, $20,000 of the fixed costs can be avoided. At what external price for the 100 units is the company indifferent between making or buying?
$210,000
$190,000
$220,000
$200,000