Climate-Control, Inc., manufactures a variety of heating and air-conditioning units. The company is currently manufacturing all of its own component parts. An outside supplier has offered to sell a thermostat to Climate-Control for $33 per unit. To evaluate this offer, Climate-Control, Inc., has gathered the following information relating to its own cost of producing the thermostat internally: Per Unit 14,100 Units per year Direct materials $ 9 $ 126,900 Direct labor 11 155,100 Variable manufacturing overhead 1 14,100 Fixed manufacturing overhead, traceable 9* 126,900 Fixed manufacturing overhead, common, but allocated 13 183,300 Total cost $ 43 $ 606,300 *40% supervisory salaries; 60% depreciation of special equipment (no resale value). Required: 1a. Assuming that the company has no alternative use for the facilities now being used to produce the thermostat, compute the total cost of making and buying the parts. (Enter "0" wherever required. Round your Fixed manufacturing overhead per unit rate to two decimal places in intermediate calculations.) 1b. Should the outside supplier's offer be accepted? Accept Reject 2a. Suppose that if the thermostats were purchased, Climate-Control, Inc., could use the freed capacity to launch a new product. The segment margin of the new product would be $134,440 per year. Compute the total cost of making and buying the parts. (Round your Fixed manufacturing overhead per unit rate to two decimals.) 2b. Should Climate-Control, Inc., accept the offer to buy the thermostats from the outside supplier for $33 each? Accept Reject rev: 04_10_2014_QC_48123