Make or Buy Tumbleton Construction uses 100 units of "Golden Key N3" each month in the production of large specialty construction equipment. The cost to manufacture one unit of "Golden Key N3" is presented as follows: $350 35 Direct Materials Materials handling (10% of materials cost) Direct labor Manuracturing overhead (150% of direct labor cost) Total Manufacturing Cost 180 270 $835 Materials handling, which is not included in manufacturing overhead, represents the direct variable costs of the receiving department that are applied to direct materials and all purchased components on the basis of their cost. Tumbleton's annual manufacturing overhead budget is one-third variable and two-thirds fixed. Wellspring, one of Tumbleton's reliable vendors, has offered to supply "Golden Key N3" at a unit price of $750 REQUIRED 1. If Tumbleton Construction purchases the 100 "Golden Key N3" units from Wellspring, the capacity Tumbleton used to manaufacture these parts would be idle. Should Tumbleton make or buy the component? What is the cost difference per unit to buy the part? 2. Assume Tumbleton Construction is able to rent all idle capacity for $20,000 per month. If Tumbleton decides to purchase the 100 units from Wellspring, what is Tumbleton's change in monthly cost for "Golden Key N3"? 3. Assume the rental opportunity does not exist. What is the minimum price Tumbleton Construction would be willing to pay Wellspring if Tumbleton requires a $10,000 savings a month before buying from an outside vendor