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Barney Enterprises manufactures one of the components used to assemble its main company product. Specialty Products, Inc., has offered to make the component at a
Barney Enterprises manufactures one of the components used to assemble its main company product. Specialty Products, Inc., has offered to make the component at a cost of $13.10 per unit. Barney Enterprises' current cost is $11.00 per unit of the component, based on the 105,000 components that Barney Enterprises currently produces Read the regurements. This current cost per unit is based on the following calculations: EfH (Click the icon to view the information) None of Bamey Enterprises' fixed costs will be eliminated if the component is outsourced. However, the freed capacity could be used to build a new product. This new product would be expected to generate $35,000 of contribution margin per year. Requirement 1. If Barney Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much? (Enter a " 0 " for any zero balances. Use. a minus sign or parentheses in the Differencecolumn when the cost to make exceeds the cost to bry) Requirement 1. If Barney Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much? (Enter a " 0 " for any zero balances. Use a minus sign or parentheses in the Difference column when the cost to make exceeds the cost to buy) If Barney Enterprises outsources the manufactuing of the component, operating income will by Requirement 2. What is the maximum price per unit Barney Enterprises would be willing to pay if it outsources the component? Begin by identifying the basic formula that is used to determine the indifferent outsourcing cost per unit. Using the basic formula you determined above solve for the indifferent outsourcing cost per unit. (Round your answer the nearest cent, $x. The maximum price per unit Barney Enterprises would be willing to pay it it outsources the component is per unit
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