(Solved):Lewis Auto Company manufactures a part for use in its production of automobiles. When 10,000…

 

Question

Lewis Auto Company manufactures a part for use in its production of automobiles. When 10,000 units are produced, the costs per unit are:

Direct materials $12

Direct manufacturing labor 60

Variable manufacturing overhead 26

Fixed manufacturing overhead 32

Total $130

Monty Company has offered to sell to Lewis Auto Company 10,000 units of the part for $122 per unit. The plant facilities could be used to manufacture another item at a savings of $198,000 if Lewis

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