1. The total cost per unit for the new supplier is $ ____.

The outsourcing option with the new supplier is _____ than insourcing.

2. Suppose the three-year volume is expected to rise 1.5 million, rather than 1 million, molded plastic parts.

The total cost per unit associated with insourcing is now $____.

The ABC Company had two options for sourcing molded plastic parts, and these options are presented in the table below. Now, the ABC Company has identified another potential supplier for the molded plastic parts. The new supplier has bid $0.1000 per part but also will impose a shipping and handling charge of $0.0200 per unit. Additional inventory handling charges should amount to $0.0060 per unit. Finally, purchasing costs are estimated at $10 per month for the length of the 36-month contract. Note that the forecasted demand is a total of 1 million units over the 36 months. More Info $.) o Insourcing option Operating Expenses Direct labor Benefits (50%) Direct material Indirect labor Benefits (50%) $0.0200 $0.0100 $0.0200 $0.0058 $0.0029 Equipment depreciation $0.0060 $6,000 absorbed over 1,000,000 units Overhead $0.0100 $0.0700 $70,000 absorbed over 1,000,000 units $0.1447 Engineering/design costs Total cost per unit Outsourcing option Purchase price Shipping and handling Inventory charges Administrative costs Total cost per unit $0.0700 $0.0150 $0.0010 $0.0015 $0.0875 Savings per unit Total savings (1 million units) $0.0572 $57,200