Tyson Corner Manufacturing produces two bearings: C15 and C19. Data regarding these two bearings follow.

C15 C19

Machine hours required per unit5.509.50

Standard cost per unit

Direct material $9.50$11.00

Direct labor 12.0011.00

Manufacturing overhead:

Variable^* 10.009.50

Fixed^** 11.0012.00

Total $42.50$43.50

^*Applied on the basis of direct labor hours

^**Applied on the basis of machine hours

The company requires 6,600 units of C15 and 11,700 units of C19. Recently, management decided to devote additional machine time to other product lines, resulting in only 99,950 machine hours per year that can be dedicated to production of the bearings. An outside company has offered to sell Tyson Corner the bearings at prices of $48.50 for C15 and $48.50 for C19.

Required:

a. Assume that Tyson Corner decided to produce all C15s and purchase C19s only as needed. Determine the number of C19s to be purchased.(Round "Machine hours per unit" to 2 decimal places.)

Machine Hours available

Less: machine hours for C15

Machine hours available for C19

Machine hours per unit of C19

Units to be manufactured

Annual requirment

Less: Units to be manufactured

C19s to purchase

b. Compute the net benefit to the company of manufacturing (rather than purchasing) a unit of C15. Repeat the calculation for a unit of C19. (Note: in answering this question, do not take into consideration any machine hours constraint).(Round your answers to 2 decimal places.)

C15 C19

Direct Material

Direct labor

Variable Overhead

Total variable cost

Purchase price quoted

Less: Total variable cost

Net Benefit per unit of manufacturing

c. Tyson Corner lacks sufficient machine time to produce all of the C15s and C19s needed. Which component (C15 or C19) should Tyson Corner manufacture first with the limited machine hours available?

Which component (C15 or C19) should Tyson Corner manufacture first with the limited machine hours available??? ---------