U-RIDE, Incorporated 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 $228 each. Current production information follows: Unit-level material and labor $ 195 Facility-level depreciation of manufacturing equipment $ 5,400 /month Product-level engine production supervisor's salary $ 2,400 /month Annual facility-level utilities $ 17,000 Buying the engines will free up manufacturing capacity that could be used to make a new economy line golf cart that would produce an additional $60,000 profit per year. U-RIDE is currently operating profitably producing and selling 2,400 engines annually. Based on this information, which of the following is true?

Multiple Choice

The cost of buying the engines is $4 per unit less than the relevant cost of making the units.

Buying the units would increase U-RIDE's cost by $21 per unit. XXXX Incorrect answer

U-RIDE has avoidable costs of less than $228 per unit and should therefore buy engines.

The $60,000 is not relevant because it is an estimate.

**Note: I answered withBuying the units would increase U-RIDE's cost by $21 per unit, and this was incorrect.**