1. If Hermantic, Inc. can purchase the components externally for $132,000 and $12,000 of the fixed costs can be avoided, what is the correct "make-or-buy" decision?

Direct Materials	$45,000
Direct Labor	$20,000
Variable Overhead	$48,000
Fixed Overhead	$33,000

Make and save $2,000

Buy and save $2,000

Make and save $7,000

Buy and save $20,000

2. Waco's Widgets plans to sell 22,000 widgets during May, 19,000 units in June, and 20,000 during July. Waco plans for an ending inventory each month which will be equal to 10% of the next month's sales. How many units should Waco produce during June?

18,000

21,000

19,100