Bonita Plus manufactures small private-label electronic products, such as alarm clocks, stopwatches, kitchen timers, calculators, and automatic pencil sharpeners. It sells some cathe products as sets and others individually. The company studies the products for their sales potential and then makes cost estimates. The engineering department develops production plans, and then production begins. The company has generally had very successful product introduction. It has discontinued only two products it has introduced. One of the products it currently sells is a multi-alarm alarm clock. The dock has four alarms that can be programmed to sound at various times and for varying lengths of time. The company has had a lot of trouble making the circuit boards for the clocks. The production process has never operated smoothly. The product is currently unprofitable, mainly because of warranty repairs and product recalls. Two models of the clocks were recalled, for example, because they sometimes caused an electric shock when the alarms were being shut off. The engineering department is trying to revise the manufacturing process, but the revision will take another six months at least The docks were very popular when they were introduced, and since they are a private label, the company has not suffered much from the recalls Presently, the company has a very large order for several items from a major retailer with locations across Canada. The order includes 3200 of the multi alarm clocks . When the company suggested that the retailer purchase the clocks from another manufacturer, the retailer threatened to cancel the entire orcher unless the clocks were included. The company has therefore investigated the possibility of having another compariy make the clocks for it. Its bid for the retailer's order was based on an estimated $5 BA cost to manufacture the docks, broken down as follows: Circuit board, 1xch$2.40 Plastic cam, each 30.60 Alarm 4 $0.11 each Labour, 15 minutes $8/hour Overhead $1.60 per labour hour $240 0.00 044 2.00 040 Bonita Plus could purchase clocks to fill the retailer's order for $8.00 from Cullumber Star, a Korean manufacturer with a very good quality record. Cullumber Star has offered to reduce the price to $6,00 after Bonita Plus has been a customer for six months and agrees to order at least 1,000 units per month. If Bonita Plus becomes a "preferred customer" by purchasing 12,000 units per year, Cullumber Star would reduce the price still further to $3.50. Kennel Products, a local manufacturer, has also offered to make clocks for Bonita Plus, it has offered to sell 3.200 clocks for $4.00 each. However, Kennel Products has been in business for only six months. It has had significant employee turnover, and the local press has reported that the owners may face tax evasion charges soon. The owner of Kennel Products is an electronics engineer, however, and the quality of the clocks is likely to be good. of Bonita Plus decides to purchase the clocks from either Cullumber Star or Kennel, all of its current costs to manufacture the alarm clock could be avoided, except a total of $3.200 in overhead costs for machine depreciation. The machinery is fairly new and has no alternative use (a) Calculate the profit under each of the alternatives if the clocks are to be sold for $11.50 each to the retailer. Profit If Bonita Plus makes electronic products $ 17,984 of Bonita Plus buys from Cullumber Star $ 10,560 If Bonita Plus buys from Kennel Products $ 23,360