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Texas A&M University-Commerce Operations And Supply Chain Management Assignment Help - the starters


Question - For many years Lansing Company has purchased the starters that it installs in its standard line of
garden tractors. Due to a reduction in output, the company has idle capacity that could be used to
produce the starters. The chief engineer has recommended against this move, however, pointing out
that the cost to produce the starters would be greater than the current $10.00 per unit purchase price.
The company’s unit product cost, based on a production level of 60,000 starters per year, is as
follows:
Make
Direct materials $4.00
Direct labor 2.75
Variable manufacturing overhead .50
Fixed manufacturing overhead, traceable 3.00 $180,000
Fixed manufacturing overhead, common
(allocated based on direct labor hours) 2.25 135 ...Read More

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