11.25 please

study to explain nulacturing costs? Now use the informa- ct. What changes would you suggest to improve Evans's efforts to reduce costs lain why the consultant recommended a second look at a rejected the increase in the average cost per unit o design. Provide computational support. What does this tell you about the strategic importance of cost management? Problem 11.25 External Linka ges, Activity-Based Supplier Costing Cortalo, Inc., manufactures riding lawn mowers. Cortalo uses JIT manufacturing and carries in- significant levels of inventory. Cortalo manufactures everything needed for the riding lawn of mowers are produced. The most popular line is he engines for the small mower line are purchased from two sources: OBJECTIVE owers except for the engines. Several sizes Verity Engines and Villa Machining. The Verity engine is the more expensive of the two and has a price of $330. The Villa engine is $297 per unit. Cortalo produces and sells 13,200 units of the small mower. Of the 13,200 engines purchased, 2,400 are purchased from Verity Engines, and 10,800 are purchased from Villa Machining. Although Linda Vasquez, production manager, prefers the Verity engine, Mark Shorts, purchasing manager, maintains that the price difference is too great to buy more than the 2,400 units currently purchased. Mark, however, does want to maintain a significant connection with Verity just in case the less expensive source cannot supply the needed quantities. Even though Linda understands the price argument, she as argued in many meetings that the quality of the Verity engine is worth the price differ Mark remains unconvinced Li Sun, controller, has recently overseen the implementation of an activity-based costing system. He has indicated that an ABC analysis would shed some light on the conflict between production and purchasing. To support this position, the following data have been collected (continued)