Question: 10.00 points Problem 9-15 Determining Whether to Accept a Special Order and Whether to Make or Buy (LO1 - CC4, 5) The Engine Guys produces
10.00 points Problem 9-15 Determining Whether to Accept a Special Order and Whether to Make or Buy (LO1 - CC4, 5) The Engine Guys produces specialized engines for "snow climber buses. The company's normal monthly production volume is 9,500 engines, whereas its monthly production capacity is 19,000 engines. The current selling price per engine is $1,350. The cost per unit of manufacturing and marketing the engines at the normal volume is as follows: Costs per Unit for Engines Direct materials Direct labour Variable overhead Fixed overhead $ 110 216 216 577 35 Subtotal Marketing costs: Fixed Subtotal Total unit cost 149 217 794 Required Answer the following independent questions 1-a. The Provincial Bus Company wishes to purchase 750 engines in October. The bus company is willing to pay a flxed fee of $1,140,000 and reimburse The Engine Guys for all manufacturing costs incurred to manufacture 750 motors. October is a busy month for The Engine Guys, and there are sufficient orders to operate at 100% capacity utilization. There will be no variable marketing costs on this govenment contract. Compute the incremental benefit of the contract l benefit of the
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