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U-RIDE, Inc. currently produces the electric engines that are used in golf carts made and sold by the Company. Electco has offered to sell the
U-RIDE, Inc. currently produces the electric engines that are used in golf carts made and sold by the Company. Electco has offered to sell the electric engines to U-RIDE at a price of $235 each. Current production information follows: Unit-level material and labor Facility-level depreciation of manufacturing equip. Product-level engine production supervisor's salary Annual facility-level utilities $ 200 $ 5,500/month $ 2,500/month $17,500 U-RIDE is currently operating profitably producing and selling 2,500 engines a year using 70% of its manufacturing capacity. Which of the following is true? Multiple Choice O U-RIDE should make the engines for cost savings of $35 per unit. Buying the units would increase U-RIDE's cost by $23 per unit U-RIDE has avoidable costs of greater than $235 per unit and should therefore buy the engines Buying the units would increase profitability by $58 per unit
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