Exhibit 1 contains information related to iPrint's monthly operating costs for the company's current activity level of 150,000 brochures per month.

The company typically priced its printing services at an average of $17 per 100 brochures printed.

The Outsourcing Opportunity:

Earle Beardsley offered to supply IPrint $8 per 100 brochures. And he could handle 30,000 brochures for you next month.

iPrint Company

Summary of Monthly Operating Costs

150.000 volume

Direct materials $ 6,000

Direct hourly labour 1,500

Direct salaries 3,000

Manufacturing equipment depreciation 1,575

Manufacturing mortgage expense 1,800

Manufacturing overhead - variable 1,500

Office depreciation 750

Office salaries 3,000

Selling expense - commissions 1,500

Selling expense - fixed 1,875

Total costs $ 22,500

Consider the outsourcing opportunity from Earle Beardsley of SmallPrint Shop. Should iPrint outsource 30,000 brochures, of its current operations, to SmallPrint? Provide both a quantitative and qualitative analysis.