A Golden Company uses part M15 in one of its products. The company's Accounting Department reports the following costs of producing the 6,700 units of the part that are needed every year. Per Unit Direct materials $11.50 Direct labor $6.10 Variable overhead $5.75 Supervisor's salary $5.50 Depreciation of special equipment Allocated general overhead $6.00 $5.50 An outside supplier has offered to make the part and sell it to the company for $38.00 each. If this offer is accepted, the supervisor's salary can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer was accepted, $4,500 of these allocated general overhead costs would unavoidable. In addition, the space used to produce part M15 could be used to make more of one of the company's other products, generating an additional segment margin of $10,500 per year for that product. Required: a. What is the financial advantage (disadvantage) of accepting the outside supplier's offer? Would Golden Company be financially better off to continue making part M15 or to buy it from an outside supplier? And why? b. Assume that Golden Company requires additional equipment that costs $40,500 to make part M15. As a result, the direct labor cost will decrease by $2.00 Would Golden Company be financially better off to continue making part M15 or to buy it from an outside supplier? And why? An outside supplier has offered to make the part and sell it to the company for $38.00 each. If this offer is accepted, the supervisor's salary can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer was accepted, $4,500 of these allocated general overhead costs would unavoidable. In addition, the space used to produce part M15 could be used to make more of one of the company's other products, generating an additional segment margin of $10,500 per year for that product. Required: a. What is the financial advantage (disadvantage) of accepting the outside supplier's offer? Would Golden Company be financially better off to continue making part M15 or to buy it from an outside supplier? And why? b. Assume that Golden Company requires additional equipment that costs $40,500 to make part M15. As a result, the direct labor cost will decrease by $2.00 Would Golden Company be financially better off to continue making part M15 or to buy it from an outside supplier? And why? c. Based on your calculation in requirements (a) and (b), which case would be better off for Golden Company? d. If Golden Company decides to make part M15, what are the advantages over buying it from an outside supplier? For the toolbar press ALT+F10/DC ALTENESOM