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1 Alanco, Inc, manufactures a variety of products and is currently maunfacturing all of its own component parts. 2 An outside supplier has offered to
1 Alanco, Inc, manufactures a variety of products and is currently maunfacturing all of its own component parts. 2 An outside supplier has offered to sell one of those components to Alanco. To evaluate this offer, the following 3 information has been gathered relating to the cost of producing the component internally: \begin{tabular}{|l|l} \hline 4 & \\ \hline 5 & Unit-level Materials \\ \hline 6 & Unit-level Labor \\ 7 & Unit-level Overhead \\ \hline 8 & Product-level Costs \\ 9 & Allocated facility-leve \\ 10 & Total cost \\ 11 & \\ 12 & Supplier price \\ 13 & \\ 14 & Units used per year \\ 15 & \end{tabular} - Product-level costs 70% of these costs can be avoided by purchasing the component Supervisor salary 1. Assuming the company has no alternative use for the facilities now being used to produce the component, complete the following analysis to determine if the outside supplier's offer should be accepted. 1. Assuming the company has no alternative use for the facilities now being used to produce the component, complete the following analysis to determine if the outside supplier's offer should be accepted
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