Fairy Godmother, Inc. manufactures a part used to assemble its main product, Pumpkin Carriage. The company's current variable cost to make the part is $12.75 per unit and its current fixed costs to make the part are $200,000 per year. Fairy Godmother has identified an outside supplier who is willing to sell the part for $13.30 per unit. 10% of Fairy Godmother's fixed costs will be elimiated if the part is purchased from the outside supplier. QUESTION 1: Given Fairy Godmother will need 100,000 units of the part per year, what is the differential income or loss if Fairy Godmother decides to purchase the part from the outsider supplier? OOOOO differential income of $125,000 differential loss of $35,000 differential income of $20,000 differential loss of $55,000 differential loss of $75,000 QUESTION 2: Now assume if Fairy Godmother chooses to outsource production of the part, the freed up capacity could be rented out to another company for $30,000 per year. What is the maximum price Fairy Godmother would be willing to pay the outside supplier and be indifferent between making and buy the part? $13.30 per part $12.75 per unit $13.25 per unit $12.45 per part $12.62 per part