ACCY211 SPRING 2021 Question 2 (20 Marks) Motor Corp. manufactures machine parts for boat engines. The CEO, James Hamilton, is considering an offer from a subcontractor who would provide 3,000 units of product AB100 for Hamilton at a price of $230,000. If Motor Corp. does not purchase these parts from the subcontractor it must produce them in house with the following per-unit costs: Direct materials Direct labor Variable overhead Allocated fixed overhead $ 40 25 15 4 In addition to the above costs, if the company produces part AB100, it would incur incremental fixed overhead costs of approximately $10,000. Required: a. What would be the impact on short-term operating income if the company were to accept the offer from the subcontractor? Show calculations to support your answer. (10 marks) b. What strategic factors/considerations are generally relevant to the special-order decision problem (i.e., whether a company should accept a one-time order from a customer with whom the company does not generally do business)? (10 marks)