due in 30 min

Grover Mechanical Company currently manufactures a valve that is a component in one of its engines. The annual production costs for 6,000 components are as follows: Material cost $8 per unit Labour cost $6 per unit Variable manufacturing overhead $2 per unit Variable batch set-up costs (total) Electronic ignition production manager's salary $18,000 Depreciation of factory equipment $4,000 Allocated foxed overhead costs $15,000 $22.000 Grover has received an offer from Oscar Company to supply 6,000 units of the component for $22 each. If the company outsources the component, it will not be able to terminate the valve production manager as he will go work in another area. The fixed overhead costs allocated to this division will be allocated to another division If the part is outsourced REQUIRED a. Prepare a quantitative analysis that indicates whether the component should be outsourced and make a recommendation to Grover Mechanical Company. Only include relevant items and make sure to calculate the TOTAL impact of the decision (7 marks) b. Would your decision change if the space could be used to manufacture 6,000 units of another product with a selling price of $15 and variable costs of $11.50 per unit? Justify your answer. (2 marks) c. Explain two (2) qualitative, non-financial, factors that should be considered relating to outsourcing decisions (2 marks)