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A company makes 35,000 motors to be used in the production of its blender. The average cost per motor at this level of activity
A company makes 35,000 motors to be used in the production of its blender. The average cost per motor at this level of activity is Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $ 9.40 $ 8.40 $ 3.40 $4.35 An outside supplier recently began producing a comparable motor that could be used in the blender. The price offered to the company for this motor is $23.65. There would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be: Multiple Choice ($66,500)
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