Black Diamond, Inc., has been manufacturing 5,000 units of part 10541 per month. At this level of pro, a ee duction, the company’s costs (expressed on a per-unit basis) follow. (LO 2,4)

W]iTTeleWel Melos oeer beter sbaeneno: Per onont cect ceeanecenance $40 FICHE ENTE CLOW teresg o separ one ccseato po sasconancehand alts) ;

sHOtAIIC OSH DCMI: emits teeters eeenceneetscerr es $55 mere Ba ie aS Yo “ug Black Diamond can outsource the manufacture of 5,000 units of part 10541 to Mogul Company at a 15 cost of $48 per unit to Black Diamond. If Black Diamond does outsource the part, it has determined EA co (9)

that it can sell some facilities it presently uses to produce part 10541 and use the remaining facilities to SS /

manufacture a new product, RAC. Black Diamond also has determined that facility costs can drop by *

one-third if it outsources part 10541 to Mogul. pies We Ye Fee NM S90 Ba Vi G OD79 Required

“ese

» H/o O09 :

a. Should Black Diamond make or buy this part? M GAR 29 8299 ($9ne.a0rs0 3 How much profit must the new product RAC generate to justify the decision to outsource part ei | Clore 10541? oe Sr 1Son 37 $009 VS B70 0es0

c. What other Oo egat are important to this outsourcing decision