A company currently produces an electric motor at its main manufacturing facility in Dayton, Ohio....
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A company currently produces an electric motor at its main manufacturing facility in Dayton, Ohio. The motor's cost when produced at the Dayton plant is $113.77 per motor. The company is currently considering outsourcing production to either a plant in Mexico or a plant in Indonesia. The company believes that producing the motor in Mexico will result in additional overhead of 15% of the motor's cost to produce it in Dayton. Furthermore, for motors produced in Mexico, the need for additional inventory will probably add $2.41 to each motor's cost, and lower quality will probably cost approximately $1.76. Shipping from Mexico will increase cost by $5.62 per motor. The cost of the motor produced in Mexico will be $103.86. If the motor is produced in Indonesia it will cost $103.52. The company estimates that the shipping cost from Indonesia will be $14.32 per motor, and the costs of additional inventory and lower quality are estimated at $3.32 and $3.43, respectively. The additional overhead is estimated to be 20% of the motor's production cost in Dayton. Conduct a total cost of outsourcing for this item. The total cost of outsourcing to Mexico is $ (Enter your response rounded to two decimal places.)
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