Edward's is considering outsourcing all labor for the next 6 months to the start-up firm, Milly Chefs. Milly Chefs will charge Edward's $1.50 per tray of egg rolls. Edward will avoid all direct labor costs, and half of both the variable and fixed delivery costs. Variable Costs per Tray: Ingredients Labor Tray Utilities Delivery $3.42 $0.78 $0.35 $0.06 $1.01 Should Edward outsource his labor? Prepare a differential analysis to answer this question 6 months of Fixed Costs (4,000u) Rent Utilities Delivery $12,000 $900 $6,800 Sa. Macon Territory New facts: Five years later... Edward's has expanded its operations dramatically. Today, Edward's is considering dropping the Macon territory altogether. It has been a drain on his earnings since he branched out in that direction. Half of Macon area fixed costs will be avoided if the Macon territory is shut down. Edward's Egg rolls Budgeted Income Statement Should May 2022 - November 2023 Milledgeville Edward drop Territory the Macon Sales Revenue $50,000 $23,500 Ingredients $12,345 $8,956 Territory? Labor 16,453 8,254 Trays Utilities Delivery 4,235 Prepare a differential Variable Costs $35,558 analysis to answer this Contribution Margin $14,442 question. Rent 6,000 Utilities - Fixed 600 Delivery 2,100 $8,700 2,200 325 1,200 225 3,500 $22,135 $1,365 1,000 100 650 $1,750 Operating Income (Loss) $5,742 (385) 5b. New facts: Five years later.... Edward's has expanded its operations dramatically, Today, Edward's is considering dropping the Macon territory altogether. It has been a drain on his earnings since he branched out in that direction. ALL of Macon area fixed costs will be avoided if the Macon territory is shut down. Macon Should Edward drop the Macon Territory? Territory Edward's Egg rolls Budgeted Income Statement May 2022 - November 2023 Milledgeville Territory Sales Revenue $50,000 Ingredients $12,345 Labor 16,453 Trays 2,200 Utilities 325 Delivery 4,235 Variable costs $35,558 Contribution Margin $14,442 Rent 6,000 Utilities - Fixed 600 Delivery 2.100 $8,700 $23,500 $8,956 8,254 1,200 225 3,500 $22,135 $1,365 1.000 100 650 $1.750 Prepare a differential analysis to answer this question Operating Income (Loss) $5,742 (385)