Assignment 12 IB - Make or Buy Howard Grills makes high-end barbecues. The company has recently been approached by a supplier who has offered to provide the company igniters (the barbecue part that provides a spark to start the flame) The company has offered a price of $5.00 per igniter. Howard's internal costs of producing the igniter follow. Per 30,000 igniters Igniter per year Direct materials Direct labour. Variable manufacturing overhead Fixed manufacturing overhead -traceable Fixed manufacturing overhead - allocated 45,000 Total $195,000 $1.25 0.25 0.50 3.00 1.50 $6.50 $37,500 7.500 15,000 90,000 23 relate to equipment maintenance and 113 relate to depreciation of specialized equipment (no resale value) Gloria Howard, the owner and CEO of Howard Grills notes: "To make 30,000 ignitets costs us $195,000, their starters are just as good and buying from them will only cost us $150,000, I'm no accountant, but it seems obvious we should take this deal." Required a.) Assuming there is no other use for the space used to make the starters, what is the net dollar advantage or disadvantage of accepting the supplier's offer? b.) If the offer is accepted the company could use the space to develop a new product line that would generate estimated margins of $25,000. Should the company accept the supplier's offer