RE: ::: vuaskari.com ::: MGT 402 is question ki samj ni aa rai some one help

Total Motors produced = 35,000

Cost/Motor:

 

 

From: vuaskari_com@googlegroups.com [mailto:vuaskari_com@googlegroups.com] On Behalf Of anjum riaz
Sent: Tuesday, February 26, 2013 11:11 AM
To: attock-vu-group; VU Pakistan; vuaskari_com@googlegroups.com; vustudymania@googlegroups.com
Subject: ::: vuaskari.com ::: MGT 402 is question ki samj ni aa rai some one help

 

The Regal, Inc. makes 35,000 motors to be used in the production of its sewing machines. The cost per motor at this level of activity would be:

Particular	Rs.
Direct materials	4.50
Direct labor	4.60
Variable factory overhead	3.75
Fixed factory overhead	3.45

An outside supplier recently began producing a comparable motor for the sewing machine. The price to Regal for this motor is Rs. 15. If Regal decided not to make the motors, there would be no other use for the production facilities. Required: If Regal decides to continue making the motor, how much higher or lower would net income be than if the motors are purchased from the outside supplier?

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