Limar, Inc manufactures three different motors AX, BX, and CX Data on the motors is presented below Budget Information AX BX CX Inventory units, January 1, 2022 2,000 2,200 2,400 Production units in 2022 3,600 3,400 3,000 Units sold in 2022 3,300 3,000 3,600 Production units in 2023 4,500 3,200 3,400 Estimated Inventory units, December 31, 2023 2,300 1,600 2,000 Cost and Production Information Selling price $620 $560 $450 Unit variable cost $360 $200 $240 Machine hours per unit 8 9 7 Avoidable fixed costs, if product line is not produced $240,000 $278,000 $255,000 Limars production capacity is 80,200 machine hours per year Limar is currently facing a business decision in 2023 KoCo, the Korean subsidiary of Limar, currently purchases 6,000 units of a simpler version (AX N) of AX, from its local supplier at $560 each If Limar was to make AX N, the company estimates that AX N would result in variable costs of $320 per unit and will require only 6 machine hours per unit to manufacture Furthermore, Limar will invest in a new stamping machine solely for the production of AX N for a fixed cost of $480,000 If Limar produces 6,000 units for KoCo, it will not produce and sell AX to compete with KoCo a) Calculate the following items AX BX CX The budgeted Sale units for each model for 2023 units units units The contribution margin per unit for each model $ $ $ The profitability index for each model (Round to 1 decimal point ) $ $ $ Ranking the order of priority for production Calculate the total production hours required for the 3 models Hours For which model should production be reduced and by how many units The number of units should be reduced b) Calculate the sale breakeven in units, if Limar decides to make AX N Then calculate the profitability index for AX and AX N c) Given the machine hour constraint, answer the following questions Number of hours required for AX hours Number of hours required for Special Order (AX N) hours Impact on BX (enter an absolute number for positive, and a bracket number for negative) hours Impact on CX (enter an absolute number for positive, and a bracket number for negative) hours d) Limar is considering taking the special order Please answering the following questions What is the benefit from the sale of AX N $ What is the cost from not selling AX $ What is the Opportunity Cost from other products $ What is the minimum transfer price per unit of AX N $ e) If Limar pays a higher tax rate than KoCo, to reduce overall taxes, what should the transfer price be (e g low, medium, high)

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Limar, Inc. manufactures three different motors AX, BX, and CX. Data on the motors is presented below: Budget Information: AX BX CX Inventory units,

Limar, Inc. manufactures three different motors – AX, BX, and CX. Data on the motors is presented below:

Budget Information:	AX	BX	CX
Inventory units, January 1, 2022	2,000	2,200	2,400
Production units in 2022	3,600	3,400	3,000
Units sold in 2022	3,300	3,000	3,600
Production units in 2023	4,500	3,200	3,400
Estimated Inventory units, December 31, 2023	2,300	1,600	2,000

Cost and Production Information:

Selling price	$620	$560	$450
Unit variable cost	$360	$200	$240
Machine-hours per unit	8	9	7
Avoidable fixed costs, if product line is not produced	$240,000	$278,000	$255,000

Limar’s production capacity is 80,200 machine-hours per year.

Limar is currently facing a business decision in 2023:

KoCo, the Korean subsidiary of Limar, currently purchases 6,000 units of a simpler version (AX-N) of AX, from its local supplier at $560 each. If Limar was to make AX-N, the company estimates that AX-N would result in variable costs of $320 per unit and will require only 6 machine hours per unit to manufacture. Furthermore, Limar will invest in a new stamping machine solely for the production of AX-N for a fixed cost of $480,000. If Limar produces 6,000 units for KoCo, it will not produce and sell AX to compete with KoCo.

Calculate the following items:	AX	BX	CX
The budgeted Sale units for each model for 2023.	units	units	units
The contribution margin per unit for each model.	$	$	$
The profitability index for each model. (Round to 1 decimal point.)	$	$	$
Ranking the order of priority for production.
Calculate the total production hours required for the 3 models.	Hours
For which model should production be reduced and by how many units?
The number of units should be reduced.

b) Calculate the sale breakeven in units, if Limar decides to make AX-N. Then calculate the profitability index for AX and AX-N

c) Given the machine hour constraint, answer the following questions:

Number of hours required for AX:	hours
Number of hours required for Special Order (AX-N):	hours
Impact on BX (enter an absolute number for positive, and a bracket number for negative):	hours
Impact on CX (enter an absolute number for positive, and a bracket number for negative):	hours

d) Limar is considering taking the special order. Please answering the following questions:

What is the benefit from the sale of AX-N?	$
What is the cost from not selling AX?	$
What is the Opportunity Cost from other products?	$
What is the minimum transfer price per unit of AX-N?	$

e) If Limar pays a higher tax rate than KoCo, to reduce overall taxes, what should the transfer price be? (e.g. low, medium, high)