#8

Required Information [The following information applies to the questions displayed below.] Harbortown Marine Products (HMP) manufactures and sells varlous fixtures for boat cabins. One fixture uses a speclalized fitting that is not used in any other HMP product. The management of HMP has considered outsourcing the fitting for several years but has never Identified a suitable suppller. HMP has collected the following data on the cost of the fitting: Rivard Fittings, a local auto supplier, contacts HMP and tells them that because of the loss of one of Rivard's customers, there is enough capacity to produce up to 5,000 units of the fitting monthly. Rivard has offered to sell HMP any quantity (up to 5,000 units monthly) at a price of $22.70 per fitting. If RIVard supplies all of the 3,360 fittings currently produced by HMP. HMP will avold all of the varlable overhead assoclated with the fitting and one-third of the fixed overhead. Management estlmates that varlable overhead for the fitting Is $5.70 per unit. Required: a. Prepare a schedule that shows the differential costs. b. Should HMP continue to make the fittings or buy them from Rivard Fittings? Complete this question by entering your answers in the tabs below. Prepare a schedule that shows the differential costs. (Enter your answers in thousands (i.e., 5,400,000-should be entered as 5,400. Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Should HMP continue to make the fittings or buy them from Rivard Fittings? Required: At what unit costs for materlals would HMP be just indifferent between making and buying the 3,360 units of the fitting If all other costs remain as predicted? (Enter your answer In 2 decimal palces.)