In details please.

Exercise: Outsourcing decision KonnectCo manufactures flash drives. Here is its cost data . Variable Costs per Unit Fixed Costs per Month $3 Manufacturing overhead Selling and administrative $20,000 8,000 4 Direct materials Direct labor Manufacturing overhead Selling and administrative 2 1 A manufacturer has offered to supply KonnectCo with all the flash drives it needs for one year at a cost of $10 each. If accepted, KonnectCo could eliminate production supervisor salaries that currently cost $1,000 per month. Normal production is 4,200 units each month. Question 1: Should KonnectCo outsource? How much outsourcing would affect KonnectCo monthly profit? Question 2: If the space currently used to manufacture can be rented for $10,000 per month, should KonnectCo outsource? 28