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Blizzard Engineering manufactures the snowblower engines that is used in several of its current snow blowers. You are responsible for deciding whether the company should

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Blizzard Engineering manufactures the snowblower engines that is used in several of its current snow blowers. You are responsible for deciding whether the company should continue to make the engine internally or acquire units from Snowflakes Electronics Inc. Snowflakes Electronics Inc. has offered to provide 15,000 engines Blizzard Engineering requires for $80.00/ unit. Blizzard Engineering has no prior relationship with Snowflakes Electronics Inc. Pnote far Rlizsord Fnainearinn th manifacture 15 nn encinee for 2023 are as follows: Of the manufacutring overhead costs, $150,000 is the fixed portion. A further $60,000 of the fixed overhead is avoidable if production of the engine is discontinued. Blizzard Engineering is curring operating at full capacity, so if the snowblower engine is purchased it will release manufacturing resources that could be used to increase internal production of other products. Or, it could allow Blizzard Engineering to accept an order from other customers taht would generate sales of $100,000 for 2,000 units This order will only involved $90,000 in total variable costs, although Blizzard Engineering will have to lease special-purpose equipment costing $12,000 for this 12 year. Required a. Evaluate the financial implications of this make-or-buy decision. Based strictly on this analysis, should the company accept the external supplier's offer? Which alternative is least costly for Blizzard Engineering? (7 marks) b. What is the maximum price Blizzard Engineering would be willing to pay the outside supplier for the small enigne. (2 marks)

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