Waiting times, relevant revenues and relevant costs (continuation of 19-31). SRG is still deciding whether or not it should introduce and sell Y28. The following table provides infor¬

mation on selling prices, variable costs, and inventory carrying costs for Z39 and Y28. SRG will incur additional variable costs and inventory carrying costs for Y28 only if it introduces Y28. Fixed costs equal to 40% of variable costs are allocated to all products produced and sold during the year.

Annual Average Number of Product Orders Average Selling Price per Order IfAverage Manufacturing Lead Time Per Order Is Fewer than 384 Hours More than 384 Hours Variable Costs per Order Inventory Carrying Costs per Order per Hour Z39 50 $32,400 $31,800 $18,000 $0.75 Y28 25 10,080 9,600 6,000 0.25 Required 1. Should SRG manufacture and sell Y28? Show all your computations.

2. What is the cutoff price per order above which SRG should manufacture and sell Y28 and below which SRG should choose not to manufacture and sell Y28?