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 overhead on the original part would be eliminated.
Required:
a.What is the relevant per unit cost for the original part?
b.Which alternative is best for Lewis Auto Company? By how much?
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Prescription Decision
The process by which medical professionals determine the most appropriate medication to treat a patient’s condition.
Affective Forecasting
The process of predicting how one would feel in response to future emotional events.
Low Grade
A term often used in education and medicine indicating a performance, quality, or condition that is below average or minimum accepted standards.
High Grade
A term indicating a level of superior quality or performance, often used in educational or professional contexts to denote excellence.
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