Boston Exemcutive, Inc., produces executive limousines and currently manufactures the mini-bar inset at these costs:

	Cost per Unit
Variable costs:
Direct material	$960
Direct labor	650
Variable overhead	310
Total variable costs	$1,920
Fixed costs:
Depreciation of equipment	$490
Depreciation of building	190
Supervisors salaries	310
Total fixed costs	$990
Total cost	$2,910

The company received an offer from Elite Mini-Bars to produce the insets for $2,120 per unit and supply 1,100 mini-bars for the coming years estimated production. If the company accepts this offer and shuts down production of this part of the business, production workers and supervisors will be reassigned to other areas. Assume that for the short-term decision-making process demonstrated in this problem, the companys total labor costs (direct labor and supervisor salaries) will remain the same if the bar inserts are purchased.

The specialized equipment cannot be used and has no market value. However, the space occupied by the mini-bar production can be used by a different production group that will lease it for $55,000 per year.

A. Calculate the differential cost of mini-bar insert. If an amount box does not require an entry, leave it blank. Cost of Making 1,100 Bar Inserts Cost of Buying 1,100 Bar Inserts Differential Cost (Savings) Variable costs Direct material $ $ $ Direct labor Variable overhead Fixed Costs Equipment depreciation Building depreciation Supervisor salaries $ $ Other Cost Savings Leased space Cost of buying bar inserts $ $ Total cost $ $