Question: Problem: Module 6 Textbook Problem 5 Learning Objective: 6-3 Make appropriate outsourcing decisions Benson Company makes and sells lawn mowers for which it currently

Problem: Module 6 Textbook Problem 5 Learning Objective: 6-3 Make appropriate outsourcing

Problem: Module 6 Textbook Problem 5 Learning Objective: 6-3 Make appropriate outsourcing decisions Benson 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. Cost of materials (14,900 Units $22) Labor (14,900 Units $14) Depreciation on manufacturing equipment* Salary of supervisor of engine production Rental cost of equipment used to make engines $ 327,800 208,600 29,000 77,000 20,000 Allocated portion of corporate-level facility-sustaining costs Total cost to make 14,900 engines 81,000 $ 743,400 *The equipment has a book value of $101,000 but its market value is zero. Required a. Determine the maximum price per unit that Benson would be willing to pay for the engines. b. Determine the maximum price per unit that Benson would be willing to pay for the engines, if production increased to 18,750 units. (For all requirements, Round your answers to 2 decimal places.) a. Maximum price per unit b. Maximum price per unit

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