Business, 23.12.2019 23:31 sepdentalcare8131

Motor company manufactures 10,000 units of part m-l each year for use in its production. the following total costs were reported last year: direct materials $ 20,000 direct labor 55,000 variable manufacturing overhead 45,000 fixed manufacturing overhead 70,000 total manufacturing cost $190,000 valve company has offered to sell motor 10,000 units of part m-l for $16.50 per unit. if motor accepts the offer, some of the facilities presently used to manufacture part m-l could be rented to a third party at an annual rental of $15,000. additionally, $4 per unit of the fixed overhead applied to part m-l would be totally eliminated. should motor company accept valve company's offer, and why? a. no, because it would be $5,000 cheaper to make the part. b. yes, because it would be $10,000 cheaper to buy the part. (this is the answer)c. no, because it would be $15,000 cheaper to make the part. d. yes, because it would be $25,000 cheaper to buy the part. e. none of the above

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Motor company manufactures 10,000 units of part m-l each year for use in its production. the followi...

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