2:307 w Lynn Hart is a managerial accountant at Paibec Corporation. Paibec is under intense cost competition, and Hart has been asked to evaluate whether Paibec should continue to manufacture part MT-RF or purchase it from Marley Company. Marley has submitted a bid to supply the 35,000 MT-RF units that Paibec will need for 2021 at a price of $15.20 each. From plant records and interviews with Jane Porter, the plant manager, Hart gathered the following information regarding Paibec's costs to manufacture 32,000 units of MT-RF in 2020: $198,400 96,000 89,000 36,000 Direct materials Direct labor Plant space rental (fixed Equipment lease (fixed) Other overhead Variable Fixed Total 112,320 137,280 $669,000 Porter also tells her that: if MT-RF is not outsourced, all variable costs per unit, space rental costs, and equipment lease costs will be the same in 2021 as in 2020, If MT-RF is purchased from Marley, plant space will not have to be rented, and equipment will not have to be leased, but it will cost $11,000 and $4,000, respectively, to terminate the two contracts, and If MT-RF is purchased from Marley, none of the fixed overhead costs can be avoided. Hart recognizes that Porter is probably concerned that outsourcing MT. RF will result in some of her close friends being laid off. She therefore performs her own independent analysis, and determines that: If MT-RF is not outsourced, direct material and direct labor costs per unit are more likely to be higher in 2021 by 10% and 3%, respectively, if MT-RF is purchased from Marley, the contract termination costs will actually be $9,000 for the space rental and $2,000 for the If MT-RF is purchased from Marley, $10,000 of the fixed overhead costs can actually be saved. Hart estimates that 35,000 units of MT-RF will be needed in 2021. REQUIRED [Note: Round unit costs to two decimal places.] Based on Hart's estimates, if MT-RF is purchased from Marley in 2021, what will be the effect on Palbec's profits? (Note: If the buy costs are less than the make costs, enter the difference as a positive number; if the make costs are less than the buy costs, enter the difference as a negative number.) Submit Answer Tries 0/6