Exercise $21\mathrm{.}7($Static$)$ Make or Buy Decision $($LO$21-1,$ LO$21-2,$ LO$21-3,$ LO$21-4)$

Bacrometer, Incorporated, makes a small cooling fan on one of its production lines. Each month the company produces $5,000$ of these fans at a variable cost of $$9$ per unit. Bacrometer received a bid from another manufacturer to provide these fans for $$10$ per unit. Bacrometer knows the production line could be rented to another manufacturer for $$7,500$ per month. Fixed costs assoclated with the production line will remain unchanged regardless of the company's decision.

Required:

a$.$ Compute the incremental cost to make with the incremental cost to buy. Remember the incremental cost to make includes the opportunity cost of the foregone rent revenue.

b$.$ Should Bacrometer continue to make these fans?

Complete this question by entering your answers in the tabs below.

Required $A$

Required B

Compute the incremental cost to make with the incremental cost to buy. Remember the incremental cost to make includes the opportunity cost of the foregone rent revenue.

$\backslash$table$[[$Incremental cost to make,$],[$Incremental cost to buy,$]]$