9. Falcon, Inc, makes and sells a large single, fancy trophy often used to recognize academic excellence Falcon has been approached by an outside supplier who has expressed interest in producing, packaging and shipping these trophies for Falcon Falcon accepts, the company would continue to sell the trophies using its own unique logo, advertising program and sales force/staff, but all production-related activities would be discontinued and all production-related buildings and equipment would be sold. 3 Points total Identify each cost/item below as to its relevancy to this outsourcing (i.e. Make vs. Buy) decision and indicate whether the cost is fixed or variable relative to the number of trophies currently manufactured and sold. Finally, which of the four cost hierarchy classifications would apply to each cost? Outsourcing (i.e. Make vs. Is the Cost/ltem Cost Cost Behavior? (Fixed or Variable) Hierarchy (Which of Four) PRODUCT or Buy) Decision for The Relevant to this Decision? Falcon Company: Cost of Emmy Award Commercials to advertise the (Yes or No) product FACILITY-LEVEL Direct Labor Costs of production (s9 per unit) Setup Costs: Specific engraving of labels for each production run YES Shipping & Handling costs ($0.89 per unit). The company would continue to ship their products to their customers Utility costs for the mfg plant (currently $0.40 per unit) The manufacturing plant manager's salary FIXED Direct Material Costs for use in production ($22 per unit) Sales Commissions for Falcon sales force (10% of sales price) Depreciation on Manufacturing equipment (S/L Depr method) Current fair market value of the Manufacturing equipment XxX Hourly Wages of plant (production) security guards %. (1 pt) Assuming Falcon is interested on a quantitative basis, list and discuss two specific aualitatie considerations that management should address prior to finalizing their decision to outsource production