6:27 260,000 Rent on factory building Lease on factory equipment Total production cost 280,000 1,100,000 Should the Company continue to make the skateboards in-house? Explain your decision. Show all working to support your decision. (10 marks) B. Later in the year, a customer approached the president of BlackBoard to undertake a special order for 3,000 skateboards for $70 each. If the special order is accepted, the company would have to buy a piece of equipment costing $35,000 to cut the skateboards to the customer's specification. The company will incur an additional salary for a supervisor of $15,500. Should BlackBoard accept the special order? Explain your decision. Show calculation to support your answer. [12 marks] = 6:27 A. Jimmy Chong is the president of BlackBoard, a company that manufactures skateboards for $110 each. Annual production is 10,000 units; however, the maximum capacity is 15,000 units. An outside supplier approached the president and offers to make the skateboard with the same specification for $85 each. Amy Jacques, the company's accountant is tasked with investigating the feasibility of the offer from the outside supplier and report to the president. The following information relates to the production of 10,000 skateboards: Cost Total Annual Cost at Per 10,000 units Unit Variable production cost Direct materials 30 300,000 Direct labour 16 160,000 Manufacturing 10 100,000 overhead Fixed production costs Rent on factory 260,000 III 6:25 Material price [2.5 marks] ii. Material usage [3.5 marks] iii. Labour rate [2.5 marks] iv. Labour efficiency [3.5 marks] B. Outline two possible causes for EACH of the variances calculated above. [8 marks]