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Stuart Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines. from a
Stuart 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 (13,800 Units $17) Labor (13,800 Units $16) Depreciation on manufacturing equipment Salary of supervisor of engine production Rontal cost of equipment used to make engines Allocated portion of corporate-level facility-sustaining costs Total cost to make 13,800 engines "The equipment has a book value of $106,000 but its market value is zero. Required $ 234,600 220,800 40,000 65,000 24,000 86,000 $670,400 a. Determine the maximum price per unit that Stuart would be willing to pay for the engines. b. Determine the maximum price per unit that Stuart would be willing to pay for the engines, if production increased to 18,650 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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