Reference no: EM132949315

Problem 1: Genesky Company is currently manufacturing Part ABS-43, producing 55,000 units annually. The part is used in the production of several products made by Genesky. The cost per unit for ABS-43 is as follows: Direct materials - $45.60; Direct labor - $9.80; Variable overhead - $2.75; Fixed overhead - $3.90; Total - $62.05. Of the total fixed overhead assigned to ABS-43, $15,400 is direct fixed overhead (the annual lease cost of machinery used to manufacture Part ABS-43), and the remainder is common fixed overhead. An outside supplier has offered to sell the part to Whener for $58. There is no alternative use for the facilities currently used to produce the part. No significant non-unit based overhead costs are incurred. What is the maximum amount per unit that Genesky would be willing to pay to an outside supplier?