14 Required Information (The following information applies to the questions displayed below Part 2 of 6 Petro Motors Inc. (PMI) produces small gasoline-powered motors for use in lawn mowers The company he been growing steadily over the past five years and is operating at full capacity PM recently completed the addition of new plant andi equipment at a cost of $7,800,000, thereby increasing its manufacturing capacity to 100,000 motors annualy The addition to plant and equipment will be depreciated on a straight-ine basis over 10 years 0.78 points Sales of motors were 60,000 units prior to the completion of the additional capacity Cost records indicated that manufacturing costs had totaled $60 per motor, of which $48 per motor was considered to be variable manufacturing Costs. PMI has used the volume of activity at full capacity as the basis for applying fixed manufacturing overhead The normal selling price is $80 per motor, and PMI pays a 5 % commission on the sale of its motors eBook LawnPro.com offered to purchase 35,000 motors at a price of $60 per unit to test the viability of distributing lawn mower replacement motors through its website. PMI would be expected to produce the motors, store them in its warehouse, and ship individual motors to LawnPro.com customers. As orders are placed directly through the LawnPro.com website, theyi would be forwarded instantly to PMI. No commissions wil be paid on this special sales order, and freight charges will be paid by the customer purchasing a motor Print b. Identify all the relevant costs that PMI should consider in evaluating the special sales order from LawnPra.com (You may select more then one answer. Single click the box with the question mark to produce a check mark for a corect answer and double cick the box with the questlon mark to empty the box for a wrong answer. Any boxes left with a questlon merk will be autometically graded as Incorrect.) References Variable manufactuning costs per motor Cost associated with storing the motors in the PMI Warehouse to awat shipment Fxed costs Commissions and freight Ned end 15 Required Information (The following information applies to the questions displayed below) Petro Motors Inc. (PMI) produces small gasoline-powered motors for use in lawn mowers. The company has been growing steadily over the past five years and is operating at full capacity. PMI recently completed the addition of new plant and equipment at a cost of $7,800,000, thereby increasing its manufacturing capacity to 100,000 motors annually The addition to plant and equipment will be depreciated on a straight-line basis over 10 years Part 3 of 6 078 points Sales of motors were 60,000 units prior to the completion of the additional capacity. Cost records indicated that manufacturing costs had totaled $60 per motor, of which $48 per motor was considered to be variable manufacturing costs. PMI has used the volume of activity at full capacity as the basis for applying fixed manufacturing overhead. The normal selling price is $80 per motor, and PMIl pays a 5 % commission on the sale of its motors. LawnPro.com offered to purchase 35,000 motors at a price of $60 per unit to test the viability of distributing lawn mower replacement motors through its website. PMI would be expected to produce the motors, store them in its warehouse, and ship individual motors to LawnPro.com customers. As orders are placed directly through the LawnPro.com website, they would be forwarded instantly to PMI. No commissions wil be paid on this special sales order, and freight charges will be paid by the customer purchasing a motor. eBook Print References c. Should the offer from LawnPro.com be accepted? Yes or No No Yes