Georgian Monitors Ltd$.,$ a manufacturer of computer monitors, currently produces a $19-$inch LCD monitor. The company's accounting department has reported the following annual costs of producing the LCD monitor internally:

Georgian Monitors

Annual Production Costs for $19-$inch LCD Monitor

Per Unit $9,000$ Units

Direct Materials $$27\mathrm{.}00$ $$243,000$

Direct Labor $$11\mathrm{.}00$ $$99,000$

Variable Overhead $$7\mathrm{.}00$ $$63,000$

Production Supervisor's Salary $$14\mathrm{.}00$ $$126,000$

Depreciation of LCD manufacturing equipment $$10\mathrm{.}00$ $$90,000$

Allocated Fixed Overhead $$6\mathrm{.}00$ $$54,000$

Total Cost $$75\mathrm{.}00$ $$675,000$

An external supplier has offered to provide Georgian Monitors $9,000$ units of the same LCD monitor per year at a price of $$45$ each.

Also consider the following information:

The LCD manufacturing equipment has no salvage value and has no other use aside from producing the $19-$inch LCD monitors. It cannot be sold.

The fixed overhead costs allocated to the LCD monitors are common to all items produced in the factory.

The production supervisor will take over duties in another department if the monitors are purchased from the external supplier. If this is the case, his annual salary will drop to $$113,400.$

Should the company continue manufacturing the monitors internally or begin purchasing them from the external supplier?

Do not enter dollar signs or commas in the input boxes.

Round all answers to $2$ decimal places.

Jenson Monitors

Make or Buy Analysis

Production Cost Per Unit Per Unit Differential Cost Total Differential Cost $(9,000$ Units$)$

Make Buy Make Buy

Direct Materials $$27\mathrm{.}00$ $Answer

$27\mathrm{.}00$

$Answer

$0\mathrm{.}00$

$Answer

$27\mathrm{.}00$

$Answer

$243000$

Direct Labor $$11\mathrm{.}00$ $Answer

$11\mathrm{.}00$

$Answer

$0\mathrm{.}00$

$Answer

$11\mathrm{.}00$

$Answer

$99000$

Variable Overhead $$7\mathrm{.}00$ $Answer

$7\mathrm{.}00$

$Answer

$0\mathrm{.}00$

$Answer

$7\mathrm{.}00$

$Answer

$63000$

Supervisor's Salary $$14\mathrm{.}00$ $Answer

$14\mathrm{.}00$

$Answer

$0\mathrm{.}00$

$Answer

$14\mathrm{.}00$

$Answer

Depreciation of Equipment $($sunk$)$ $$10\mathrm{.}00$ $Answer

$0\mathrm{.}00$

$Answer

$0\mathrm{.}00$

$Answer

$0\mathrm{.}00$

$Answer

Allocated Fixed Overhead $($common$)$ $$6\mathrm{.}00$ $Answer

$0\mathrm{.}00$

$Answer

$0\mathrm{.}00$

$Answer

$0\mathrm{.}00$

$Answer

Outside Purchase Price $Answer

$0\mathrm{.}00$

$Answer

$0\mathrm{.}00$

$Answer

$45\mathrm{.}00$

$Answer

Total Relevant Cost $$75\mathrm{.}00$ $Answer

$0\mathrm{.}00$

$Answer

$0\mathrm{.}00$

$Answer

$30\mathrm{.}00$

$Answer

The company should: Answer