Problem: Module 6 Textbook Problem 5 Learning Objective: 6-3 Make appropriate outsourcing decisions Vernon 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. Cost of materials (13,400 Units $23) Labor (13,400 Units $20) 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 13,400 engines "The equipment has a book value of $106,000 but its market value is zero. Required $308,200 268,000 26,000 77,000 19,000 72,000 $ 770,200 a. Determine the maximum price per unit that Vernon would be willing to pay for the engines. b. Determine the maximum price per unit that Vernon would be willing to pay for the engines, if production increased to 18,450 units. (For all requirements, Round your answers to 2 decimal places.) a. Maximum price per unit b. Maximum price per unit