Assume that if Sandhill Water accepts Cliftons offer, the company can use the freed-up manufacturing facilities to manufacture a new line of growing lights. The company estimates it can sell 93,050 of the new lights each year at a price of $13. Variable costs of the lights are expected to be $10 per unit. The timer unit supervisory and clerical staff would be transferred to this new product line. Calculate the total relevant cost to make the timer units and the net cost if they accept Clifton's offer.

Question 2 Sandhill Water Co. is a leading producer of greenhouse irrigation systems. Currently, the company manufactures the timer unit used in each of its systems. Based on an annual production of 40,330 timers, the company has cakculated the following unit costs Diroct fixed costs include supervisory and clerical salaries and equipment depreciation. Direct materials Direct labor Variable manufacturing overhead Direct fixed manufacturing overhead Allocated fixed manufacturing overhead $12 10 (30% salaries, 70% depreciation) 10 Total unit cost $42 cifton Clocks has offered to provide the timer units to Sandhill at a price of $34 per unit. If Sandhill accepts the offer, the current timer unit supervisory and clerical staff will be laid off (a1) Your answer is correct. Calculate the total relevant cost to make or buy the timer units. (Round answers to O decimal places, eg, S250.) Make Buy 100825 1371220 Total relevant cost Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO VIDEO