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Harcourt Manufacturing (HM) has the capacity to produce 11,300 fax machines per year. HM currently produces and sells 8,300 units per year. HM currently leases
Harcourt Manufacturing (HM) has the capacity to produce 11,300 fax machines per year. HM currently produces and sells 8,300 units per year. HM currently leases its excess capacity for a rental fee of $61,000. The fax machines normally sell for $230 each. Modem Products has offered to buy 3,300 fax machines from HM for $125 each. Unit-level costs associated with manufacturing the fax machines are $41 each for direct labor and $66 each for direct materials. Product-level and facility-level costs are $63,000 and $78,000, respectively. Based on this information (ignore qualitative characteristics) Harcourt Manufacturing (HM) has the capacity to produce 11,300 fax machines per year. HM currently produces and sells 8,300 units per year. HM currently leases its excess capacity for a rental fee of $61,000. The fax machines normally sell for $230 each. Modem Products has offered to buy 3,300 fax machines from HM for $125 each. Unit-level costs associated with manufacturing the fax machines are $41 each for direct labor and $66 each for direct materials. Product-level and facility-level costs are $63,000 and $78,000, respectively. Based on this information (ignore qualitative characteristics)
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