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ABC Co . produces vacuums. An outside supplier has offered to make the 8 , 0 0 0 vacuum motors needed each year. The company
ABC Co produces vacuums. An outside supplier has offered to make the
vacuum motors needed each year. The company provides the following per
unit cost information for vacuum motors, assuming a production level of :
Additional information:
ABC will keep the factory supervisor regardless of whether vacuum motor
production is outsourced.
If vacuum motor production is outsourced, the special equipment will be
discarded and the allocated general overhead can be reduced by
What is the maximum price per motor that this company should be willing to
pay to purchase the vacuum motors from the outside supplier? Round to the
nearest dollar and cents.
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