Blossom Firm is considering whether to outsource the manufacture of subcomponent JXY. The accounting department provides the following cost information for manufacturing 12,000 units of subcomponent JXY per month.

Direct materials costs		$39,500
Direct labour costs		28,100
Variable overhead		16,800
Fixed overhead*		13,700

*Fixed overhead includes $4,300 supervisors salary.

International Firm agrees to supply Blossomwith 12,000 units per month for a total cost of $142,000. If subcomponent JXY is outsourced, Blossom will be able to increase the production and sales of its final product by 1,180 units per month; the product is sold for $115 per unit and its average variable costs per unit are $75. The supervisors salary will be eliminated if subcomponent JXY is outsourced

Prepare an incremental analysis for subcomponent IXY. (zt an amount reduces the incremental costs then enter with a negative Incremental Costs Make Buy (Savings) Based on your analysis, what decision should management make? Management should clecide to JXY as it would cost an additionals if they were to the units. Would the decision be different if Montel has the opportunity to produce and sell 2,000 units with the facilities currently being used to ma