9 3 points PB7-2 (Static) Analyzing Make-or-Buy Decision [LO 7-2, 7-4] Greenview Corporation is considering the possibility of outsourcing the production of the upholstered chair pads included with some of its wooden chairs. The company has received a bid from a company in China to produce 1,000 units per year for $9 each. Greenview has the following information about its own production of the chair pads: Direct materials Direct labor Variable manufacturing $ 4 1 2 overhead eBook Fixed manufacturing overhead 3 $ 10 Total cost per unit References Greenview has determined that all variable costs could be eliminated by dropping production of the chair pads, and that 30 percent of the fixed manufacturing overhead is avoidable. At this time, Greenview has no specific use in mind for the space currently dedicated to producing the chair pads. Required: 1. Compute the difference in cost between making and buying the chair pads. 2. Should Greenview buy the chair pads or continue to make them? 3. Suppose a new product line Greenview wants to develop could utilize the space currently used for the chair pads. How much profit must the new product line generate for Greenview to be indifferent between making or buying the chair pads? Complete this question by entering your answers in the tabs below. Required Required Required 1 2 3 Should Greenview buy the chair pads or continue to make them? Should Greenview buy the chair pads or continue to make them? < Required 1 Required 3 > 9 3 points PB7-2 (Static) Analyzing Make-or-Buy Decision [LO 7-2, 7-4] Greenview Corporation is considering the possibility of outsourcing the production of the upholstered chair pads included with some of its wooden chairs. The company has received a bid from a company in China to produce 1,000 units per year for $9 each. Greenview has the following information about its own production of the chair pads: Direct materials Direct labor Variable manufacturing $ 4 1 2 overhead eBook Fixed manufacturing overhead 3 $ 10 Total cost per unit References Greenview has determined that all variable costs could be eliminated by dropping production of the chair pads, and that 30 percent of the fixed manufacturing overhead is avoidable. At this time, Greenview has no specific use in mind for the space currently dedicated to producing the chair pads. Required: 1. Compute the difference in cost between making and buying the chair pads. 2. Should Greenview buy the chair pads or continue to make them? 3. Suppose a new product line Greenview wants to develop could utilize the space currently used for the chair pads. How much profit must the new product line generate for Greenview to be indifferent between making or buying the chair pads? Complete this question by entering your answers in the tabs below. Required Required Required 1 2 3 Compute the difference in cost between making and buying the chair pads. Differential Cost of Making Versus Buying < Required 1 Required 2 > 9 3 points PB7-2 (Static) Analyzing Make-or-Buy Decision [LO 7-2, 7-4] Greenview Corporation is considering the possibility of outsourcing the production of the upholstered chair pads included with some of its wooden chairs. The company has received a bid from a company in China to produce 1,000 units per year for $9 each. Greenview has the following information about its own production of the chair pads: Direct materials Direct labor Variable manufacturing $ 4 1 2 overhead eBook Fixed manufacturing overhead 3 $ 10 Total cost per unit References Greenview has determined that all variable costs could be eliminated by dropping production of the chair pads, and that 30 percent of the fixed manufacturing overhead is avoidable. At this time, Greenview has no specific use in mind for the space currently dedicated to producing the chair pads. Required: 1. Compute the difference in cost between making and buying the chair pads. 2. Should Greenview buy the chair pads or continue to make them? 3. Suppose a new product line Greenview wants to develop could utilize the space currently used for the chair pads. How much profit must the new product line generate for Greenview to be indifferent between making or buying the chair pads? Complete this question by entering your answers in the tabs below. Required Required Required 1 2 3 Suppose a new product line Greenview wants to develop could utilize the space currently used for the chair pads. How much profit must the new product line generate for Greenview to be indifferent between making or buying the chair pads? Profit Show less