Hickman Inc. manufactures a variety of heating and air-conditioning units. The company is currently manufacturing all of its own component parts. An outside supplier has offered to sell a thermostat to Jillian for $80 per unit. To evaluate this offer, Hickman, Inc. has gathered the following information relating to its own cost of producing the thermostat internally: Direct Materials Direct Labor Variable Manufacturing Overhead Fixed Manufacturing overhead, traceable Fixed manufacturing overhead,common, but allocated Total Cost Per Unit15,000 Units per Year 360,000 480,000 60,000 300,000 600,000 $120 $1,800,000 * 40% supervisory salaries: 60% depreciation of special equipment (no resale value) $ 24 32 4 20* 40 4) How much would it cost Hickman to manufacture the product in house? a. $120 b. $68 d. $100 5) Suppose that if the thermostats were purchased, Hickman, Inc. could use the freed capacity to launch a new product. The segment margin of the new product would be $260,000 per year. Should Hickman, Inc. accept the offer to buy the thermostats from the outside supplier for $80 each? SHOW YOUR WORK