Fri Mar 17 xam202302 Home Insert Draw Layout Review View Calibri Regular (Bo 11 BIU aAv A v Ev Ev Question 3: (17 points) Lincoln Steel Company produces automobile bumpers, sold for $90 per bumper. Cost data are as follows: Materials cost is $42.00, labor cost is $14.00 and allocated overhead is $26.25 per unit. Each bumper includes one unit of mounting hardware. The mounting hardware has materials cost of $12 and labor cost of $1.60 (these numbers are included in the values provided earlier for the bumper as a whole). Each unit of the mounting hardware takes 0.20 machine hours (12 minutes) and all other work takes 1.55 machine hours (=1 hour 33 minutes) for a total of 1.75 machine hours (1 hour 45 minutes). Lincoln allocates overhead based on labor cost and estimates that 2/3 of the allocated amount represents fixed manufacturing costs. Defining capacity in terms of machine hours, it estimates that it can make up to 155,000 bumpers per year (as per the current process for making bumpers). Indiana automobiles has offered to supply as many units of mounting hardware as needed for $16 per unit. Profit impact of accepting offer from Indiana automobiles (part a) $ Profit impact of accepting offer from Indiana automobiles (part b) $ (a) (6 points) Suppose that Lincoln is operating at a volume of 120,000 bumpers per year. What is the profit impact of accepting the offer from Indiana Automobiles? HELLO | -| B I O 44 DII K @ N 4 5 O 18 O W E R T Y U O P