Big Horizons Company manufactures 15,000 units of product T-1 each year at a selling price of $30 per unit. At this level of activity, the costs related to this part are as follows: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Total cost per unit $ 8.00 7.50 2.50 8.00 $26.00 Required: 1. Big Horizons can buy 15,000 units from a supplier for $24.00 per unit. If Big Horizons purchases the units, they will avoid $350 of the fixed manufacturing overhead indicated above, a. Should the supplier's offer be accepted? Why? (6 marks) b. Suppose that if product T-1 was purchased from the supplier, Big Horizons could use that manufacturing space to produce a different product with a segment margin of $18.000 for the year. Should the supplier's offer be accepted? Why? (2 marks) 2. Big Horizons has received a request to fill an order for 2,000 units of product T-1 at a special price of $25.00 each. The product would be customized with the customer's logo at an additional cost of $2.75 per unit. Big Horizons has excess capacity to fill this order and the order will not affect the company's fixed costs. a. If this order is accepted by how much will annual profits be increased or decreased? (6 marks) b. Should this order be accepted? Why? (1 mark)