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Present products corporation manufactures and sells 1,000 motorcycle engines each month A primary component in each motor is an of pump used to keep the
Present products corporation manufactures and sells 1,000 motorcycle engines each month A primary component in each motor is an of pump used to keep the motor lubricated prudent products has the monthly capacity to produce 1, 500 oil pumps. The variable unit costs associated with manufacturing each pump are show below: Fixed manufacturing overhead per month (up to 1, 500 units of production)averages $46,000. Vok's Autos, Inc, has offered to purchase 250 of pumps from prudent products per month to be used in its own motorcycles. Prudent product's average unit cost of manufacturing each of pump it is rejects vok's Autos' order is $ per unit The incremental unit cost of producing each additional of pump is $ per unit. If this special order in accepted the price per unit that prudent products could charge vok's Autos in order to earn a $20,000 monthly pretax profit on the sale in $ per unit
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