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  3. 2. reginald is the controller for scoot inc. scoot

2. Reginald is the controller for Scoot Inc. Scoot makes mobility scooters for senior citizens...

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Accounting

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2. Reginald is the controller for Scoot Inc. Scoot makes mobility scooters for senior citizens who have difficulty walking. Scoot has always manufactured the motors for its scooters in- house; however, the marketing manager of Moto Industries has offered to sell motors to Scoot for $420 each At the current level of demand of 4,500 units, the cost to produce one motor is as follows Unit cost $130 140 290 $ 560 Direct materials Direct labour Manufacturing overhead (60% fixed) Total Reginald has approached the company engineers with this proposal. They discussed the option of purchasing the motors from Moto and producing a new scooter called the Turbo X in the manufacturing space previously used to produce the motors. It is estimated that Scoot could sell 750 Turbo X scooters per year. The estimated costs to produce one unit of Turbo X are as follows: Unit cost $1,000 780 120 320 Direct materials Direct labour Variable manufacturing costs Additional fixed manufacturing costs At what selling price for the Turbo X will Scoot be indifferent between continuing to manufacture the motors in-house and outsourcing the motors and manufacturing the Turbo X? a) $2,076 b) $2,104 c) $2,424 d) $3,120

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