Manson Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to make 12,400 of the assembly part at $6 per unit. If the offer is accepted, Manson will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Manson will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		Make		Buy		Net Income Increase (Decrease)
Variable manufacturing costs		$enter variable manufacturing costs in dollars		$enter variable manufacturing costs in dollars		$enter variable manufacturing costs in dollars
Fixed manufacturing costs		enter fixed manufacturing costs in dollars		enter fixed manufacturing costs in dollars		enter fixed manufacturing costs in dollars
Purchase price		enter the purchase price in dollars		enter the purchase price in dollars		enter the purchase price in dollars
Total annual cost		$enter total annual cost in dollars		$enter total annual cost in dollars		$enter total annual cost in dollars

The decision should be to select between make and buy buymake the part.

Before Conklan could give Langstons Landscape Company an answer, they received a special order from Benson Building & Supply for 15,400 fireplaces. Benson is willing to pay $64 per fireplace but they want a special design imbedded into the fireplace that increases cost of goods sold by $67,760. The special design also requires the purchase of a part that costs $4,700 and will have no future use for Conklan Company. Benson Building & Supply will pick up the fireplaces so no shipping costs are involved. Due to capacity limitations, Conklan cannot accept both special orders. Which order should be accepted? Document your decision by preparing an incremental analysis for Bensons order. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).)

		Reject order		Accept order		Net Income Increase (Decrease)
Revenues		$		$		$
Costs
Cost of Goods Sold
Operating Expenses
Unique part
Net Income		$		$		$

Conklan should accept the order from Langstons Landscape CompanyBenson Building and Supply.