D) Incremental Analysis Given the intense level of competition, the C.E.O. indicates that he is considering purchasing one of the products from a foreign supplier instead of continuing with the production. With this in mind he has supplied the following information about the production costs with respect to its woolen product: Direct Materials $ 75.00 Direct Labour $ 50.00 Overheads $ 150.00 Total Cost $ 275.00 The Overhead cost include $ 10.00 of Material Handling expenses. The remainder of the overheads is split 60% variable and 40% Fixed. The company can purchase these woolen products for $ 225.00 per unit. You are now asked to: 1) Define the terms Relevant Costs and Sunk Costs in the context of an incremental analysis. 5 Marks 2) Prepare an Incremental Analysis to assist Management in the decision as to whether to continue making the product or purchase it from an outside supplier. 12 Marks 3) Based on the analysis, advise management as to the best decision. 3 Marks