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 Sandhil 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 preduction of 40,330 timers, the company has caculated the following unt costs. Direct fixed costs include aupervisory and clerical salaries and equipment depreciation Direct materials Direct labor Variable manufacturing ovarhaad Direct fixed manufacturing overhead Allocated fixed manufacturing overhcod 10 $12 10(30% salaries, 70% depreciation) Total unit cose $42 cilifton Clocks has oftered to proide the timar units to Sandhill at a price of $34 per unit. Ir Sandhill accopts the offer, the current timer unit superviscry and clarical staff wil be laid off. (a1) Your answer is correct. Calculate the total relevant cost to make or buy the timer units. (Round answers to 0 decimal places, e.g. s,250.) Make Bary 1008 1371220 Total relevent cost Click if you would like to Show Work for this questioni Open Show Work LINK TO VIDEO Attempts: 1 of 3 used (a2) Your answer is correct. Assuming that Sandhill Water has no other use for ether the faciities or the equipment currently used to manufacture the timer units, should the company accept Clifton's offer? No # Click if you would like to Show Work for this questioni Open Show Work SHOW SOLUTION LINK TO TEXT