Question: will thumbs up for correct answer 5 re Question 22 5 pts Zip Inc. manufactures electric generators. Zip is considering whether to continue to make
5 re Question 22 5 pts Zip Inc. manufactures electric generators. Zip is considering whether to continue to make the motors it uses in its generators or to buy motors from an outside supplier. At the budgeted level of annual production of 1,000 units, Zip's per-unit costs of manufacturing the motors in-house is as follows: Direct materials $95 Direct labor $65 Variable manufacturing overhead $23 Fixed manufacturing overhead $50 Zip will avoid 30% of its fixed manufacturing overhead costs if it buys the motors from an outside supplier. In addition, producing a motor in-house requires 4 hours of machine time, which is a constrained resource. If Zip buys the motors, this machine time would be freed up to produce more units of another product that requires 8 hours of machine time per unit and has a contribution margin of $90 per unit. At what per-unit purchase price is Zip neither better off nor worse off if it buys the motors from an outside supplier rather than makes the motors in-house? $198 $228 $243 $263 None of the above
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