Lewis Auto Company Manufactures a Part for Use in Its

question 74

Essay

Lewis Auto Company manufactures a part for use in its production of automobiles.When 10,000 items are produced,the costs per unit are:

Monty Company has offered to sell Lewis Auto Company 10,000 units of the part for $120 per unit.The plant facilities could be used to manufacture another part at a savings of $180,000 if Lewis Auto accepts the supplier's offer.In addition,$20 per unit of fixed manufacturing support on the original part would be eliminated.
Required:
a.What is the relevant cost per unit for the original part?
b.Which alternative is best for Lewis Auto Company? By how much?

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Definitions:

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A condition resulting from not getting enough sleep, which can affect cognitive function, mood, and overall health.

Alcohol

A psychoactive substance commonly found in beverages such as beer, wine, and spirits, known for its depressant effects on the central nervous system.

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A stage of sleep characterized by slow brain waves, minimal body movement, and reduced response to external stimuli, crucial for restorative processes.