2. The Coil Company n4anufactures 10.000 rolls of Cable each period. The cable s used as an input for producing several other products that Coil manufactures, The full manufacturing costs for e batch of 100 rolls of cable are: Direct materials $170 Direct labor 100 Variable manufacturing overhead 100 Average fixed manufacturing overhead 175 Total $545 The fixed manufacturing overhead is comprised of depreciation expenses related to prior investments in facilities and equipment that are used in the manufacturing of the cable. These assets have no other use than for the manufacturing of the cable. An outside supplier has offered to sell Coil the 10,000 rolls of cable necessary to meet production needs this period for a lump-sum of $45,000. If Coil accepts this outside supplier?s offer, how much better or worse oft will the company be? Answer: Relevant cost to make: Direct materials ($170 100 batches) Direct labor ($100 * 100 batches) Variable overhead ($100 * batches) Total cost to make Cost to buy 45000) The company will be worse off by ($8000