Sutherland manufactures and sells 110000 laser printers

Reference no: EM13579446

Sutherland manufactures and sells 110,000 laser printers each month. A principal component part in each printer is its paper feed drive. Sutherland's plant currently has the monthly capacity to produce 150,000 drives. The unit costs of manufacturing these drives (up to 150,000 per month) are as follows: Variable costs per unit: Direct materials $ 45 Direct labor 25 Variable manufacturing overhead 5 Fixed costs per month: Fixed manufacturing overhead $ 1,500,000 Desk-Mate Printers has offered to buy 20,000 paper feed drives from Sutherland to be used in its own printers.

Reference no: EM13579446

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