How much higher or lower will the company

Reference no: EM132959512

Question: Jordan Company makes 30,000 motors to be used in the productions of its power lawn mowers. The manufacturing cost per motor at this level of activity is as follows:

Direct materials $9.20 Direct labor $8.60 Variable MOH $3.75 Fixed MOH $4.35

This motor has recently become available from an outside supplier for $25 per motor. If Jordan decides not to make the motors, none of the fixed manufacturing overhead would be avoidable and there would be no other use for the facilities. If Jordan decides to continue making the motor, how much higher or lower will the company's net operating income be than if the motors are purchased from the outside supplier?Required to answer.

Reference no: EM132959512

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