Cost of materials (13,100 Units $22) Labor (13,100 Units $21) Depreciation on ma

Question

Cost of materials (13,100 Units $22) Labor (13,100 Units $21) Depreciation on manufacturing equipment. Salary of supervisor of engine production Rental cost of equipment used to make engines Allocated portion of corporate-level facility-sustaining costsS Total cost to nake 13,100 engines 288,200 275,100 41,000 72,000 27,000 85,000 $ 788,300 The equipment has a book value of $103000 but its market value is zero. Required a. Determine the maximum price per unit that Campbell would be willing to pay for the engines b. Determine the maximum price per unit that Campbell would be willing to pay for the engines, if production increased to 18.200 units? For all requirements, round your intermediate calculations and final answers to 2 decimal places.) a. Maximum price per unit b. Maximum price per unit

Explanation / Answer

Part 1

$50.56

Part 2

$48.44

Here, material and labour cost would be same but salary and rental payments will be distributedin 18200 units. Dividee them by 18200 to get figures

Cost of Material $2,88,200.00 Labour $2,75,100.00 Salary $72,000.00 Rent $27,000.00 Total $6,62,300.00 Cost per Unit

$50.56

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