Please help to solve these problems

3. Continuing from question no 2. Suppose that Cerine buys HDS from outside supplier, Cerine best use of the available capacity is to produce 5,000 units of RS, a regular switch , for Tredy Company. John, the accountant at Cerina, estimates the following future revenues and future costs if RS is manufactured and sold : Additional future revenue $80,000 Additional future costs Direct materials $30,000 Direct labour 5,000 Variable overhead 15,000 Materials handling and setup overheads 5,000 Total additional future costs 55,000 Additional future operating income 25,000 Cerine can make either HDS or RS, but not both. What should Cerine do?2. The Cerine Company manufactures thermostats - consisting of relays, switches, and valves - for home and industrial use. Cerine makes its own switches. The following table reports the current costs for HDS. its heavy duty switch. based on the analysis of its various manufacturing activities. Total current Current cost Expected Expected cost 0 per unit (5) total cos cost per producing of unit 10.000 unit producing ($) (3) 10,000 units next Direct materials 80.000 Direct labour IE_ 10000 [M "It\" overhead costs for power and utilities _-" fixed) manufacturing overhead costs 0 setu - 5 Fixed manufacturing 30,000 30,000 lease, insurance, and administration Total manufacturing 177.500 17.75 180.000 costs? Material handlings and set up activities occur each time batch of HDS is made. Cerine produces 20,000 units if HDS in 25 batches of 400 units each. The number of batches is the cost driver for these costs. Total materials handling and set up costs equaf fixed cost of $5,000 plus $500 variable cost per batch ($5,000 + (25 x $500) = $17,500). Cerine commences production after it receives customer order. Cerine anticipates that next year , the 10,000 units of HDS expected to be sold will be manufactured in 50 batches of $200 units each. Through continuous improvement, Cerine expects to reduce variable cost per batch for materials handling and set up to $300. No other changes in fixed cost or variable costs per unit are anticipated. Another manufacture offers to sell Cerine 10,000 units of HDS next year for $16 per unit on whatever delivery schedule Cerine wants. Assume that financial factors predominate in this make or buy decision, should Cerine make or buy HDS