Platt Instruments produces and sells medical devices for both home and professional use. One line of products that has been consistently profitable for Platt is its range of sphygmomanometers (blood pressure monitors). Platt sells professional models to hospitals and doctors' offices. Platt also sells a simpler model for personal use. The professional models sell for an average of $160 per unit, and the personal models sell for an average of $50 unit. For the last few years, Platt has focused on manufacturing the professional model and has outsourced the production, but not distribution, of its personal use models. Platt has contracted with Westmoreland Products, which produces a wide range of electronic products, to produce the monitor. The contract can be cancelled by either party with 30 days' notice. The arrangement has worked well, and there have been no significant problems with delivery or quality of the outsourced monitors. Platt pays a flat $25 for each monitor Westmoreland supplies. In addition to the Westmoreland fee, Platt incurs a shipping and handling cost (variable overhead cost) of $1 per unit on the monitors it buys from Westmoreland. In addition, monthly (overhead) fixed costs of shipping, packaging, and handling amounting to $60,000 are incurred for the personal monitor products. Current and expected demand for personal monitors is 7,500 units per month. Managers at Platt are considering bringing the personal monitors back inside Platt where they would both produce and distribute the units. The financial and manufacturing stist have put together some estimates of costs if the monitors were to be produced internally. Based on their analysis, direct materials cost would be $8 per unit and direct labor costs would be $4 per unit. These costs are both variable. Under the outsourcing arrangement with Westmoreland, Platt pays neither any material nor labor cost. Estimating the overhead costs that Platt would incur if it produced the monitors internally was a bit more difficult, but the staff analysts at Platt estimated that by using Westmoreland, Platt is saving 75 percent on the variable overhead costs (shipping and handling) and 60 percent on fixed overhead costs associated with the Questions 1. What are the total costs associated with the Produce Internally option if the demand is for 7,500 units? 2. Which of the following statements regarding the 10,000 -unit scenario is accurate? 3. What is the demand level at which Platt Instruments is indifferent? 4. Assuming that Platt Instruments experiences demand of 10,000 units, what is the fee at which the company would be indifferent between the two options? 5. Assuming that demand is for 11,000 units, which of the following statements is accurate