Adams Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. Adams produces a relatively small amount (16,000 unlts) of the cream and is considering the purchasee of the product from an outside suppller for $4.60 each. If Adams purchases from the outside supplier, It would continue to sell and distribute the cream under its own brand name. Adams's accountant constructed the following profitability analysls: Revenue (16,eee units $1e.50) Unit-level materials costs (16,088 units $1.50) Unit-level labor costs (16,008 units x $8.60) Unit-level overhead costs (16,e08 x $8.28) Unit-level selling expenses (16,080 se.30) Contribution margin Skin cream production supervisor's salary Allocated portion of facility-level costs Product-level advertising cost $168,008 (24,e00) (9,600) (3, 200) (4,800) 126,408 (45,e08) (11,580) (35,000) $ 34,900 Contribution to companywide incone Required Identify the cost Items relevant to the make-or-outsource decislon. b. What Is the avoidable Cost per unit if the outsourcing decislon Is taken? Should Adams continue to make the product or buy it from the suppler? c. Suppose that Adams is able to Increase sales by 10,000 units (sales will Increase to 26,000 unlts). Calculate the total avoidable costs. At this level of productlon, should Adams make or buy the cream? a. Complete this question by entering your answers in the tabs below. Required A Required B Required C Identify the cost items relevant to the make-or-outsource decision. Total avoidable costs What is the avoidable cost per unit if the outsourcing decision is taken? Should Adams continue to make the product or buy it from the supplier? (Round your answer to 2 decimal places.) Total avoidable costs per unit Should Adams continue to make the product or buy it from the supplier? Required A Required C Suppose that Adams is able to increase sales by 10,000 units (sales will increase to 26,000 units). Calculate the total avoidable costs. At this level of production, should Adams make or buy the cream? Total avoidable costs At this level of production, should Adams make or buy the cream? Required B Required C >