11.

Instant Enterprises manufactures one of the components used to assemble its main company product. Specialty Products, Inc., has offered to make the component at a cost of $12.50 per unit. Instant Enterprises' current cost is $18.75 per unit of the component, based on the 125,000 components that Instant Enterprises currently produces. Read the requirements. Requirement 1. If Instant Enterphises outsources the manulacturing of the component, will operating income increase or decrease? By how much? (Enter a "" far any zaro besances. Use a minus sign or parentheses in the Difference column when the cost to make excoeds the cost to buy.] This current cost per uni is based on the following calculations: (Click the iton to view the inloemation.) None of Instant Enterprises foxed oosts will be eiminated if the componant is outsourced. However, the heed capacity could be used to buld a new product. This new product would be expectied to generabe $2?,000 of contribution margin per year ng incame increase or decrease? By how much? Eerter a " for any zaro bahances Use a minus Data table Requirements 1. If Instant Enterprises outsources the manutacturing of the component, will operating income increase or decrease? By how much? 2. What is the maximum price per unit Instant Enterprises would be willing to pay if it outsources the component