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Question - XYZ Company makes 20,000 motors to be used in the production of its power lawn mowers. The cost permotor at this level of activity is as follows:
Direct materials $ 9.50
Direct labor 8.60
Variable overhead 3.75
Allocated fixed overhead 4.35
Total $26.20
The motor has recently become available from an outside supplier for $25 per motor. If XYZ purchasesthe motor from the outside supplier, the space that is currently being used to manufacture the motorcan be rented out for $154,000 per year. Calculate the selling price per unit charged by the outside supplier that would make XYZ economically indifferent between making and buying the motor. Enter your answer with two places after the decimal.
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