12Requiree nformation [The following information applies to the questions displa

Question

12Requiree nformation [The following information applies to the questions displayed below.j 2.85 points Perry's Cycle Company manufactures annually 20,000 units of TushSeat, a bicycle seat used on many of the company's products, and also sold directly to retailers for $38 per unit. At the current level of production, the cost per unit to produce TushSeat consists of: Skipped Direct materials Direct labor Variable overhead Fixed overhead It has come to the attention of management that a seat of similar quality can be purchased from outside suppliers. Assume that Perry's fixed costs remain unchanged if the seats are purchased from an outside supplier. In order to operate more profitably by buying the seats rather than manufacturing them, Perry must negotiate a price per unit from the outside supplier that is less than:

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Direct Materials per unit                       9.00 Direct Labour per unit                       7.00 Variable overhead per unit                       6.00 Total relevant cost per unit to make                     22.00 Thus perry must negotiate a price per unit from the outside supplier that is less than $22 per unit

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