Prepared based on monthly production and sales

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Consider the following information, prepared based on monthly production and sales of 150,000 units: Category Cost per Unit Variable manufacturing costs $30.00 Variable marketing costs $10.00 The firm has total fixed costs of $1,800,000 and currently sells the product for $120 per unit. a) Assume the company is producing and selling 150,000 units per month. It is considering an arrangement where an outside manufacturer would produce and ship the product directly to customers. Under this arrangement, variable marketing costs would decrease 60% per unit and $750,000 in fixed costs would be avoided. What is the maximum amount per unit the company would be willing to pay to the outside manufacturer? b) List and describe other factors that should be taken into consideration when deciding whether to accept this offer. Be specific in your responses.

Reference no: EM131264390

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