Freeman Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,400 containers follows.

Unit-level materials	$	5,100
Unit-level labor		7,000
Unit-level overhead		3,200
Product-level costs*		7,800
Allocated facility-level costs		27,300

*One-third of these costs can be avoided by purchasing the containers.

Baxi Container Company has offered to sell comparable containers to Freeman for $2.70 each.

Required a-1. Calculate the total relevant cost. Total relevant cost a-2. Should Freeman continue to make the containers? Yes No b-1.Freeman could lease the space it currently uses in the manufacturing process. If leasing would produce $11,200 per month, Calculate the total avoidable costs. Total avoidable costs b-2. Should Freeman continue to make the containers? O Yes No