3. The deceptively simple Make or Buy problem (10 points) Stephans Corporation currently manufactures product A-1. The costs per unit are as follows (based on a 30,000 unit forecast): Direct materials $ 1.00 Direct labor 10.00 Variable overhead 5.00 Fixed overhead 8.00 Total $24.00 BillCo has contacted Stephans with an offer to sell them all 30,000 of the needed subassemblies for $20.00 each. Stephans can eliminate $84,000 of its fixed overhead if it accepts the proposal and shuts down the assembly line. Alternatively, if Stephans chooses to outsource A-1, instead of shutting down the line, it could use the freed up manufacturing capacity to make 4,000 units of product 2-B. The sales price of 2-B is $80 and the variable cost is $22 per unit. Q- What is the net effect on operating income if Stephans chooses to accept the offer from Billco and shuts down the assembly line? Q- What is the net effect if Stephans chooses to accept the offer but decides to make 2-B with the freed up capacity? 2-B or not 2-B; that is the