Rooney Company makes and sells lawn mowers for which it currently makes the engines. It has...
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Rooney 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 (13,500 Units $17) Labor (13,500 Units $22) 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 *The equipment has a book value of $99,000 but its market value is zero. Required $ 229,500 297,000 40,000 72,000 22,000 79,000 $ 739,500 a. Determine the maximum price per unit that Rooney would be willing to pay for the engines. b. Determine the maximum price per unit that Rooney would be willing to pay for the engines, if production increased to 18,750 units. (For all requirements, Round your answers to 2 decimal places.) a. Maximum price per unit b. Maximum price per unit Rooney 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 (13,500 Units $17) Labor (13,500 Units $22) 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 *The equipment has a book value of $99,000 but its market value is zero. Required $ 229,500 297,000 40,000 72,000 22,000 79,000 $ 739,500 a. Determine the maximum price per unit that Rooney would be willing to pay for the engines. b. Determine the maximum price per unit that Rooney would be willing to pay for the engines, if production increased to 18,750 units. (For all requirements, Round your answers to 2 decimal places.) a. Maximum price per unit b. Maximum price per unit
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