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Please provide answer for direct materials, direct labor, variable overhead, cost of purchase and total savings/additional costs. Spectacular Motors has manufactured compressor parts at its
Please provide answer for direct materials, direct labor, variable overhead, cost of purchase and total savings/additional costs.
Spectacular Motors has manufactured compressor parts at its plant in Pitcairn, Indiana, for the past 25 years. An outside supplier, Award Winning Compressor Company, has offered to supply compressor model C38 at a price of $240 per unit. Current unit manufacturing costs for C38 are as follows: E (Click the icon to view the unit costs.) Requirement (a.) Should Award Winning Compressor's offer be accepted if the Pitcairn plant is presently operating below capacity? (b.) What is the maximum acceptable purchase price if the plant facilities are fully utilized at present and if any additional available capacity can be deployed for the production of other compressors? . Data Table $ 70 40 Direct materials Direct labor Variable overhead Fixed overhead Total costs 55 13 EA 178 Requirement (a) Should Award Winning Compressor's offer be accepted if the Pitcairn plant is presently operating below capacity? Complete the following analysis of the cost to purchase the compressor model C38. (Use a parentheses or minus sign to show a net additional cost of purchasing the C38. Leave unused cells blank.) Item Relevant amount Savings: Direct materials Direct labor Variable overhead Additional costs: Cost of purchase Total savings (additional costs)Step by Step Solution
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