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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

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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 $30 per unit. To evaluate this offer, Climate-Control. Inc.. has gathered the following information relating to its own cost of producing the thermostat internally: 40% supervisory salaries: 60% depreciation of special equipment (no resale value). 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. It Should the outside supplier's offer be accepted? 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 $ 105,200 Should Climate-Control, Inc.. accept the offer to buy the thermostats from the outside supplier for $30 each? Accept Reject

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