CoursHeroTranscribedText: Auswest Company needs 1000 motors in its manufacture of motor cars. It can buy...
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CoursHeroTranscribedText: Auswest Company needs 1000 motors in its manufacture of motor cars. It can buy the motors from Bathurst Motors for $1250 each. Auswest's plant can manufacture the motors for the following costs per unit: Direct materials $500 Direct manufacturing labour 250 Variable manufacturing overhead 200 Fixed manufacturing overhead 350 Total $1300 If Auswest buys the motors from Bathurst, 70% of the fixed manufacturing overhead applied will not be avoided. Required: a. Should the company make or buy the motors? 2.5 marks b. What additional factors should Auswest consider in deciding whether or not to make or buy the motors? 2.5 marks
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