6-1 MyAccountingLab Homework: Chapter 11 Question 2, E11-25 (similar to) > Part 1 of 5 The Sundance Corporation manufactures cellular modems. It manufactures its own cellular modem circuit boards (CMCB), an important part of the cellular modem. It reports the following cost information about the costs of making CMCBS in 2017 and the expected costs in 2018: (Click the icon to view the costs.) (Click the icon to view Read the Gairemans Direct materials Direct manufacturing labor Variable batch manufacturing costs Fixed manufacturing costs Avoidable fixed manufacturing costs Unavoidable fixed manufacturing costs Total manufacturing costs Total Manufacturing Manufacturing Costs of CMCB Cost per Unit More info Sundance manufactured 11,000 CMCBS in 2017 in 55 batches of 200 each. In 2018, Sundance anticipates needing 4,000 CMCBS. The CMCBS would be produced in 40 batches of 100 each. The Maverick Corporation has approached Sundance about supplying CMCBS to Sundance in 2018 at $390 per CMCB on whatever delivery schedule Sundance wants. Print Done - X Requirements 1. Calculate the total expected manufacturing cost per unit of making CMCBS in 2018. 2. Suppose the capacity currently used to make CMCBs will become idle if Sundance purchases CMCBS from Maverick. On the basis of financial considerations alone, should Sundance make CMCBS or buy them from Maverick? Show your calculations. 3. Now suppose that if Sundance purchases CMCBS from Maverick, its best alternative use of the capacity currently used for CMCBS is to make and sell special circuit boards (CB3S) to the Excite Corporation. Sundance estimates the following incremental revenues and costs from CB3s: Total expected incremental future revenues Total expected incremental future costs $2,500,000 $2,675,000 On the basis of financial considerations alone, should Sundance make CMCBS or buy them from Maverick? Show your calculations. Data table Variable manufacturing costs Direct material cost per CMCB Direct manufacturing labor cost per CMCB Variable manufacturing cost per batch for setups, materials handling, and quality control Fixed manufacturing cost Fixed manufacturing overhead costs that can be avoided if CMCBS are not made Print Done Current Costs Expected Costs in 2017 in 2018 195 $ 182 45 41 1,400 2,000 220,000 280,000 Data table Direct material cost per CMCB Direct manufacturing labor cost per CMCB 195 $ 182 45 41 Variable manufacturing cost per batch for setups, materials handling, and quality control 1,400 2,000 Fixed manufacturing cost Fixed manufacturing overhead costs that can be avoided if CMCBS are not made 220,000 280,000 Fixed manufacturing overhead costs of plant depreciation, insurance, and administration that cannot be avoided even if CMCBS are not made 1,430,000 560,000