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TB MC Qu. 12-75 The SP Corporation makes. The SP Corporation makes 47,000 motors to be used in the production of Its sewing machines. The
TB MC Qu. 12-75 The SP Corporation makes. The SP Corporation makes 47,000 motors to be used in the production of Its sewing machines. The average cost per motor at this level of activity is Direct naterials $10. 60 Direct labor Variable 1anufacturing overhead 4 00 Fixed naufacturing overhead 4, 95 An outside supplier recently began producing a comparable motor that could be used in the sewing machine. The price ofrered to SP Corporation for this motor is $27.25. If SP Corporation decides not to make the motors avoided. Direct labor is a varlable cost in this company. The annual financlal advantage (disadvantage) for Coul the company as a result of making the motors rather than buving them from the outside supplier would be: Multiple Choce $331.350 143.350 ($89.300) $232.650
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