Hart Company currently manufactures lawnmowers. It currently produces 10,000 blades each year that it installs in the mowers. Hart has calculated the following costs for making each blade:

Unit-level costs:

Material $2.00

Labor 2.80

Overhead .20

In addition to the unit level costs, Hart pays an annual lease of $30,000 (Fixed Facility-Level Cost) for the mower factory. It also spends $15,000 each year on advertising for its mowers.

Hart is considering outsourcing the manufacturing of blades to a supplier who has offered to sell 10,000 blades to Hart for $5.40 each.

a) Prepare an analysis that indicates whether outsourcing should be accepted or rejected.

b) How would Hart