The SP Corporation makes 48,000 motors to be used in the production of its sewing...
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The SP Corporation makes 48,000 motors to be used in the production of its sewing machines. The average cost per motor at this level of activity is: Direct materials $10.70 $ 9.70 Direct labor Variable manufacturing overhead $ 4.05 $ 5.00 Fixed manufacturing overhead An outside supplier recently began producing a comparable motor that could be used in the sewing machine. The price offered to SP Corporation for this motor is $27.55. If SP Corporation decides not to make the motors, there would be no other use for the production facttities and none of the fixed manufacturing overhead cost.could be avoided. Direct labor is a variable cost in this company The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would pe Multiple Choice ($91,200) $343,200 148.800 $240000
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