help please

Electron Ltd. ("Electron") manufactures various electronic devices. Each of the devices (final products) which Electron sells to the entity's customers is assigned to a specific department within Electron. One of the devices which Electron manufactures is a laptop called "Valedictorian" and is assigned to department H within Electron. Each Valedictorian is defined as a unit as a Valedictorian is the final product sold to customers. The current market demand for Valedictorian is 670 per financial year, and department H has the sufficient operational and non-operational capacity to meet this demand. The market is willing to pay R8 000 per Valedictorian. Electron's management accountant drafted the following budgeted costing report: The operational manager has performed research and encountered an international supplier which will be able to manufacture the required Valedictorians on Electron's behalf. In return, the intemational supplier would want a remuneration of R2 200 per Valedictorian (inclusive of R290 delivery fees per unit). As the international supplier will manufacture the Valedictorian products, no addition of materials will be required to the purchased units. It will also cause the current employees of Department H to become redundant within Electron. A once-off retrenchment fee of R35 000 in total will be paid to these employees. Scenario 1 The variable manutacturing overheads will be avoidable should Valedictorians' production be outsourced while the non-manufacturing variable overheads will reduce with R45 000 over a financial year. Fixed manufacturing overheads will be decreased to R110 900 per financial year, however, the non-manufacturing fixed overheads will remain as is as they are largely non-dependant on Valedictorians. Electron's capacity which was utilised on Valedictorians will initially have no altemative use. Scenario 2 Electron will utilise the free capacity which becomes avalable, if Valedictorians are outsourced, on a new product - eTab. With this free capacity, Electron will be able to manulacture 740 eTabs per financial year which is expected to also be sold within the relevant year of manufacturing for R5 700 each. The current materials used directly in Valedictorians production, wil not be useful in eTabs production as a new type of material will be required which will amount to R800 per eTab. The current department H direct manufacturing employees will then not become redundant as previously mentioned, but they will rather be trained at a total cost of R49 000 to be able to manutacture eTabs. Their total wages will however be decreased by R 300 per eTabs. Each eTabs requires the same amount of direct labour hours as each Valedictorian. Both the variable and fixed manufacturing overheads will increase to R252 000 per annum and R182000 per annum respectively. The variable non-manufacturing overheads will remain the same as currently while the nonmanufacturing fixed overheads incurred for a financial year will decrease with R11 000 . 1.2. Refer to Scenario 2. Advise Electron Ltd. whether it would be more beneficial to continue manufacturing Valedictorians during the next financial year, OR to make use of the international supplier. Support your answer with the necessary calculations. (14 marks)