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Solomon 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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Solomon 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 (13,000 units $23) Labor (13,880 Units 518) 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 13,800 engines 5 317.400 248,400 29,000 69.000 13.000 83.000 $759,100 *The equipment has a book value of $100.000 but its market value is zero Required a. Determine the maximum price per unit that Solomon would be willing to pay for the engines b. Determine the maximum price per unit that Solomon would be willing to pay for the engines i production increased to 17850 units (For all requirements, Round your answers to 2 decimal places.)

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