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Campbell Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. Campbell produces

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Campbell Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. Campbell produces a relatively small amount (19,000 units) of the cream and is considering the purchase of the product from an outside supplier for $4.90 each. If Campbell purchases from the outside supplier, it would contin ue to sell and distribute the cream under its own brand name. Campbell's accountant constructed the following profitability analysis: Revenue (19,000 units $12.00) $228,000 Unit-level materials costs (19,000 units $1.40) Unit-level labor costs (19,000 units x $0.90) Unit-level overhead costs (19,000 $o.50) Unit-level selling expenses (19,000 $0.20) (26,600) (17,100) (9,500) (3,800) Contribution margin 171,000 skin crean production supervisor's salary Allocated portion of facility-level costa (46,000) (12,300) 38,000) - Product-level advertising cost Contribution to companyvide income $ 74,700 Required .. Identify the cost items relevant to the make-or-outsource decision. b. What is the avoidable cost per uit f the outsourcing decision is taken? Should Campbell conthue to make the product or buy it c Suppose that Campbell s able to increase sales by 10,000 units (sales will Iicrease to 29,000 units). Calculate the total avoidable from the supplier? costs. At this level of production, should Campbell make or buy the cream? Complete this question by entering your answers in the tabs below. Prey2 of 4 Complete this question by entering your answers in the tabs below. Required A Required B Required C Identify the cost items relevant to the make-or-outsource decision Required B> Complete this question by entering your answers in the tabs below. Required ARequired B Required C What is the avoidable cost per unit if the outsourcing decision is taken? Should Campbell continue to make the product or buy it from the supplier? (Round your answer to 2 decimal places.) Total avoidable costs per unit Should Campbell continue to make the product or buy it from the supplier?

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