Cost Accounting - Please kindly help with (2) blanks. Please round when required!! Please show work :)

Example: Each year, Ingmar Company produces 12,900 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.32. The unit cost is:

Round intermediate calculations to the nearest cent. Use rounded answers in subsequent computations, if required.

Direct materials	$0.72
Direct labor	0.34
Variable overhead	0.15
Fixed overhead	2.22
Total unit cost	$3.43

The alternatives for Ingmar Company are: continue making the component in-house, or purchasing the component from the outside supplier. Assuming that none of the fixed cost is avoidable, determine which alternative is more cost effective: A: Make the component in-house. If Ingmar accepts the offer to purchase from the outside supplier, operating income will be $ **BLANK ANSWER** lower.

Now suppose that Ingmar Company rents machinery capable of making 12,900 units of the component per year and the annual lease cost is $12,900 (this is included in the fixed overhead for the component). The lease can be cancelled whenever Ingmar wants without penalty. The machinery lease cost is relevant . Determine which alternative is more cost effective: A: Purchase from out side supplier. If Ingmar accepts the offer to purchase from the outside supplier, operating income will be $**BLANK ANSWER** higher.