Exercise 6-11A Establishing price for an outsourcing decision LO 6-3 Vernon Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here Cost of materials (14,800 Units $27) Labor (14,800 Units x $22) Depreciation on manufacturing equipment* Salary of supervisor of engine production Rental cost of equipment used to make engines Allocated portion of corporate-level facility-sustaining costs Total cost 399,600 325,600 27,000 77,000 13,000 73,000 $915,200 to make 14,800 engines The equipment has a book value of $100,000 but its market value is zero Requirec a. Determine the maximum price per unit that Vernon would be willing to pay for the engines b. Determine the maximum price per unit that Vernon would be willing to pay for the engines, if production increased to 17,950 units? (For all requirements, round your intermediate calculations and final answers to 2 decimal places.) aximum price per unit Maximum price per unit a. M b