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Help Save & Exit Submit Check my work "That old equipment for producing carburetors is...

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Accounting

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Help Save & Exit Submit Check my work "That old equipment for producing carburetors is worn out, said Bill Seebach president of Hondrich Company. "We need to make a decision quickly," The company is trying to decide whether it should rent new equipment and continue to make its carburetors 20 points internally or whether it should discontinue production of its carburetors and purchase them from an outside supplier. The alternatives follow Alternative 2 Rent new equipment for producing the carburetors for $176.000 per year Alternative 2 Purchase carburetors from an outside supplier for $20.70 each eBook of producing the carturetors internaly (with the old equipment are given below These costs Print are based on a current activity level of 32.000 units per year Direct materials Direct labour Variable overhead Fixed overhead ($2.75 supervision, $1.80 depreciation, s 5.70 18.08 2.00 and $4.e0 general company overhead) 8.55 Total cost per unit $26.25

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