ACCOUNTING. ASAP!!!!

Problem 2: Decision Making (15 Points) Part 1: Make or buy (10 points) Hanson, Inc. makes 5,000 units per year of a part called SRM for use in one of its products. Data concerning the unit production costs of the SRM follow: Direct materials Direct labor S50 S40 Variable manufacturing overhead $30 Fixed manufacturing overhead $80 Total manufacturing cost per unit $200 An outside supplier has offered to sell Hanson all of the SRMs it requires for $180 each. If Hanson decided to discontinue making the SRMs, 60% of fixed manufacturing overhead costs could be avoided being used to (a) Assume that the company has no alternative use for the facilities that are now produce the SRMs. What would be the financial advantage (disadvantage) of buying 5,000 SRMs from the outside supplier instead of making them? Should the outside supplier's offer be accepted? (5 points) (b) Assume that if the SRMs were purchased, Hanson could use the freed capacity to launch a new product. The segment margin of the new product would be $90,000 per year, Given this new assumption, what would be financial advantage (disadvantage) of buying 5,000 SRMs from the outside supplier instead of making them? Should the outside supplier's offer be accepted? (5 points) blem 2 continued from previous paei Part 2: Utilization of a constrained resource (5 points) The constraint at Sawyer Inc. is an expensive milling machine, which can only be operated for 40 hours or 2,400 minutes a week. The two products listed below use this constrained resource LK Selling price per unit S98 S200 $80 Variable cost per unit $50 Time on the constraint 3 minutes per unit 10 minutes per unit Weckly market demand 600 units 100 units k. Is the company able (a) Recall that the milling machine can only be operated for 2,400 minutes a wee to meet the weekly market demand for both products? Please support your answer point) (b) Recall that the milling machine can only be operated for 2,400 minutes a week. How many units each of the two product should be produced so that the company can generate the maximum amount of contribution margin? (4 points)