Nesbitt Enterprises manufactures one of the components used to assemble its main company product. Specialty Products, Inc., has offered to make the component at a cost of $$13\mathrm{.}10$ per unit.

Nesbitt Enterprises' current cost is $$15\mathrm{.}00$ per unit of the component, based on the $115,000$ components that Nesbitt Enterprises currently produces. This current cost per unit is based on the

following calculations:

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None of Nesbitt Enterprises' fixed costs will be eliminated if the component is outsourced. However, the freed capacity could be used to build a new product. This new product would be expected to

generate $$35,000$ of contribution margin per year.

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Requirement $1.$ If Nesbitt Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much? $($Enter a $"0"$ for any zero balances. Use a minus

sign or parentheses in the Difference column when the cost to make exceeds the cost to buy.$)$

Requirements $2$

If Nesbitt Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much?

What is the maximum price per unit Nesbitt Enterprises would be willing to pay if it outsources the component? PLEASE ANSWER BOTH REQUIREMENTS!