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28 Sep 2019
Kentucky Motors has manufactured compressor parts at itsplantin Pitcairn, Indiana, for the past 18 years. ANoutsidesupplier, Superior Compressor Company, has offered tosupplycompressor model A238 at the price of 200 per unit.Unitmanufacturing costs for A238 are as follows: Directmaterials 80 Directlabor 60 Unitrelatedsupport 26 Batchrelatedsupport 22 Product sustaining support 8 Facility sustaining support 17 Totalcosts $213 a. Should SUperior Compressor's offer be accepted if theplantis presently operating below capacity? b. What is the maximum acceptable purchase price if theplantfacilities are fully utilized at present and if anyadditionalavailable capacity can be deployed for the production ofothercompressors?
Kentucky Motors has manufactured compressor parts at itsplantin Pitcairn, Indiana, for the past 18 years. ANoutsidesupplier, Superior Compressor Company, has offered tosupplycompressor model A238 at the price of 200 per unit.Unitmanufacturing costs for A238 are as follows:
Directmaterials 80
Directlabor 60
Unitrelatedsupport 26
Batchrelatedsupport 22
Product sustaining support 8
Facility sustaining support 17
Totalcosts $213
a. Should SUperior Compressor's offer be accepted if theplantis presently operating below capacity?
b. What is the maximum acceptable purchase price if theplantfacilities are fully utilized at present and if anyadditionalavailable capacity can be deployed for the production ofothercompressors?
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28 Mar 2023
Lelia LubowitzLv2
28 Sep 2019
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