ALL ANSWERS MUST BE ENTERED AS A FORMULA.

Alanco, Inc manufactures a variety of products and is currently maunfacturing all of its own component parts.

An outside supplier has offered to sell one of those components to Alanco. To evaluate this offer, the following

information has been gathered relating to the cost of producing the component internally:

Assuming the company has no alternative use for the facilities now being used to produce the

component, complete the following analysis to determine if the outside supplier's offer should be accepted.