Happy Homes Happy Homes makes fan units at subsidized prices for nursing homes. In November 2022, managers are contemplating the manufacture of a new fan that will be introduced in 2023. The planned sales price is $75/fan. One component used to make the fan is the motor. To date, Happy Homes has made its motors in house. The factory supervisor along with an engineer has determined that the following cost components comprise the cost of making the motors at an expected production level of 100,000 units: Direct Materials $12.00 Direct Labor 8.00 Utilities, misc. parts 4.00 (variable costs) Production Mgr. Salary .50 Allocated Fixed Manu. Costs 8.00 Design Services .40 Insurance .10 (only used if inhouse) Cost/motor $33.00 Insurance relates to an additional fixed cost that will be necessary only if the motors are made in house. The Production Managers salary is an allocated cost as this manager is responsible for oversight of all motors made by Happy Homes. In 2023, it is expected that the manager will get a 10% raise (not reflected here). Utilities and misc. parts are variable costs. Design Service costs relate to $40,000 that was incurred in early 2022 in designing a workable motor for this new fan. Allocated fixed manufacturing costs relate to items such as building and machinery depreciation, property taxes, factory supervisors salary, etc. It also includes costs of renting some machinery. The machinery used at present can produce these new motors without any additional changes. Capacity constraints at the factory, however, are an issue. In fact, Happy Homes will need to rent additional machinery and will propose allocating the additional rental cost of $175,000 to all the motors it manufactures since the machinery can be utilized in manufacturing any of the Happy Homes motors. Recently, Happy Homes received an offer to outsource these motors from another company, Vista Motors. Vista will sell the motors for the fan units to Happy Homes for a price of $26.50 each. Required: 1. Should Happy Homes outsource the motors or continue making them in house? 2. Assume Happy Homes expects demand for the new fan to be 50,000 units. Determine whether or not they should outsource the motors. 3. At what level of expected fan sales would Happy Homes be indifferent?break even