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Munoz Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable

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Munoz 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. Cont of materials (13,500 Units X $15) Labor (13,500 Units X $19) 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 to make 13,500 engines $ 202,500 256,500 41,000 68,000 21,000 72,000 $ 661,000 *The equipment has a book value of $97,000 but its market value is zero. Required a. Determine the maximum price per unit that Munoz would be willing to pay for the engines (.e. where the cost would be the same and management would be indifferent between making and buying on a quantitative basis). b. Determine the maximum price per unit that Munoz would be willing to pay for the engines, if production increased to 18,150 units (assuming the same indifference as defined in part "a"). (Zeigler Note: For all requirements, Round your answers to 2 decimal places.) a. Maximum price per unit bi Maximum price per unit

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