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Vernon 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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Vernon 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. Cont of naterialo (14,000 Unito * $16) Labor (14,000 Units - $22) Depreciation on manufacturing equipment. Salary of supervisor of engine production Rental cost of equipment used to make engines Allocated portion of corporato-lovel tacility-sustaining conto Total cost to make 14,000 engine $ 224,000 308,000 38,000 80,000 17.000 31,000 $ 768.000 *The equipment has a book value of $107.000 but its market value is zero. Required a. Determine the maximum price per unit that Vernon would be willing to pay for the engines. b. Determine the maximum price per unit that Vernon would be willing to pay for the engines, if production increased to 18,450 units. (For all requirements, Round your answers to 2 decimal places.) Maximum price per unit b. Maximum price per unit

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