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Davey Enterprises manufactures one of the components used to assemble its main company product. Specialty Products, Inc., has offered to make the component at a

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Davey Enterprises manufactures one of the components used to assemble its main company product. Specialty Products, Inc., has offered to make the component at a cost of $12.30 per unit. Davey Enterprises' current cost is $13.50 per unit of the component, based on the 90,000 components that Davey Enterprises currently produces. Read the requirements. es manufactures one of the components used to assemble its main t. Specialty Products, Inc., has offered to make the component at a cost it. Davey Enterprises' current cost is $13.50 per unit of the component, 000 components that Davey Enterprises currently produces. Requirements 1. If Davey Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much? 2. What is the maximum price per unit Davey Enterprises would be willing to pay if it outsources the component? This current cost per unit is based on the following calculations: (Click the icon to view the information.) None of Davey Enterprises' fixed costs will be eliminated if the component is outsourced. However, the freed capacity could be used to build a new product. This new product would be expected to generate $35,000 of contribution margin per year. operating income increase or decrease? By how much? (Enter a " 0 " for any zero balances. Data table Davey Enterprises manufactures one of the components used to assemble its main This current cost per unit is based on the following c company product Spedialy Products, Inc, has offered to make the component at a cost of 512.30 per unit Davey Enterprises' current cost is $13.50 per unit of the component. based on the 90,000 components that Davey Enterprises currently produces outsourced. However, the freed capacity could be us Read the requirements This new product would be expected to generate $35 per year. Requirement 1. II Davey Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much? (Enter Use a mirus sign or parentheses in the Dilference column whien the cost to make exceeds the cont to buy)

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