Mountain Air limited manufactures a line of room air purifiers. Management is currently evaluating the possible production of an air purifier for automobiles. Based on annual volume of 10000 units, the predicted cost of the unit of an auto air purifier follows:

direct materials: $8 direct labor: $1.50 factory overhead: $8 total: $17.50

These cost Productions include $16,000 in Factory level fixed factory overhead average over 10,000 units.

one of the component parts of the auto air purifier is a battery-operated electric motor. Although the company does not currently main factor these motors, the preceding cost predictions are based on the assumption that it will assemble such a motor. Mini motor company has offered to supply and assembled battery-operated motor at the cost of $5 per unit, with the minimum annual order of 5,000 units. Is mountainair accept this offer, it'll be able to reduce the variable labor and variable overhead cost of the auto air purifier by 50%. The electric motor component will cost $2 if mountain air assembles the motors.

Determine whether our Mountain are just continue to make the electric motor or outsourced from mini motor company.

QUESTION 2 Blank shoxha Mountain Air Limited manufactures a line of room air purifiers. Management is currently evaluating the possible production of an purifier for automobiles. Based on an annual volume of 10 000 units, the predicted cost per unit of an auto air purifier follows Direct materials 58.00 Direct labor 150 Factory overhead 8.00 Total $17.50 These cost predictions include 560,000 in facility-level faxed factory overhead averaged over 10.000 units One of the component parts of the auto air purifier is a battery operated electric motor. Although the company does not currently manufacture these motors, the preceding cost predictions are based on the assumption that it will assemble such a motor Mini Company has offered to supply an assembled battery operated motor at a cost of $5.00 per unit, with a minimum annual order of units. If Mountain Air accepts this offer, it will be able to reduce the variable labor and variable overhead costs of the auto air purifi 50 percent. The electric motor's components will cost $2.00 f Mountain Air assembles the motors ca Determine whether Mountain Air should continue to make the electric motor or outsource it from Mini Motor Company Calculate the net advantage disadvantage of outsourcing the electric motors from Mini Motor Company Use a negative sign with your answer to indicate a net disadvantage of applicable) 25 Chok Sare and Subtot and submit Click Sal Auers to sew all ads . Save Al Ans