Make-or-buy, relevant costs The assembly division of Cassandra Resolution, Inc., is bidding on an order of 1,000 TV sets. The division is anxious to get this order because it has a substantial amount of unused plant capacity. The variable cost for each TV set is \(\$ 600\) in addition to the cost of the picture tube. The divisional purchasing manager has received two bids for the picture tube. One is from Cassandra Resolution's picture tube division. This bid is for \(\$ 55\) per picture tube, although its variable cost is only \(\$ 42\) per tube. The other is from an outside vendor for \(\$ 65\) per unit. Cassandra Resolution's picture tube division has sufficient unused capacity for this order.

Required

a. Determine the relevant costs for this order for the assembly division under both internal and outsourcing arrangements.

b. Determine the relevant costs for this order for Cassandra Resolution as a company under each of the sourcing arrangements.