MSI is considering outsourcing the production of the handheld control module used with some of its products. The company has received a bid from Monte Legend Co. (MLC) to produce 19,000 units of the module per year for $17.00 each. The following information pertains to MSi's production of the control modules: 4 2 7 Direct materials $10 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per unit $23 MSI has determined that it could eliminate all variable costs if the control modules were produced externally, but none of the fixed overhead is avoidable. At this time, MSI has no specific use in mind for the space that is currently dedicated to the control module production. Required: 1. Compute the difference in cost between making and buying the control module. Answer is complete and correct. Difference in Cost $ 19,000 2. Should MSI buy the modules from MLC or continue to make them? Buy Make 3-a. Suppose that the MSI space currently used for the modules could be utilized by a new product line that would generate $39.000 in annual profit. Recompute the difference in cost between making and buying under this scenario Answer is complete and correct. Difference in Cost $ 20.000 MS considering ting a product from its Tods own Town This contra o Two produch, The Pet Store Parade wd The Grocery Getaway, have impressive sales. However, as for the hand in the cocon The Post Pethe SCO hection day for production MS information related to the Todd Town Tours collection follow Segmented income Toide Town Tours Products Post Pet Store Cory Once G Pok To 31230001200 SX 53000 19000 30 000 132.000 Corrbuong 372000 57000 540003747 Loss Dreat Food costs 300 7000 3.200 18 600 Segnant me 564200 $630310 Less Commons 6000 1700 1304 37057,600 Allocated based on to a dollars Mas determined that enabon of the Post Office Poka (POP) program would not read of the the waters The maig federace you to the product was the man products 2. SMA drop the POP Type here to search O 3-a. Calculate the incremental effect on profit if the POP product is eliminated Suppose that $1200 of the common foxed costs could be avoided if the product line were eliminated Effect on Profit 3-b. Should MSI drop the POP product? Yes O No