Problem 13-2531 (Algol Effects of the level of production on on outsourcing decision LO133 Benson Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. Benson produces a relatively small amount [18,000 units] ofthe cream and is considering the purchase of the product from an outside supplier for $4.80 each. If Benson purchases from the outside supplier, it would continue to sell and distribute the cream under its own brand name. Benson's accountant constructed the following protability analysis: Revenue {18,999 units x $11.59) $29?,999 Unitlevel materials costs (18,969 units x $1.?9) (36,699) Unit-level labor costs [18,999 units K $9.89) (14,499) Unit-level overhead costs (18,999 x $9.49) [?,299) Unitlevel selling expenses {18,699 x $9.59) 9,999} Contribution margin 145,899 Skin cream production supervisor's salary (56,999) Allocated portion of facility-level costs (11,999) Productlevel advertising cost 34,999} Contribution to companywide income $ 49,939 | Required 5. Identify the cost items relevant to the makeoroutsource decision. In. What is the avoidable cost per unit if the outsourcing decision is taken? Should Benson continue to make the product or buy it from the supplier? c. Suppose that Benson is able to increase sales by 7.000 units {sales will increase to 25,000 units}. Calculate the total avoidable costs. At this level of production, should Benson make or buy the cream? Required A Required B Required C Identify the cost items relevant to the make-or-outsource decision. Total avoidable costs Required A Required B Required C What is me avoidable cost per unit if the outsourcing decision is taken? Should Benson continue to make the product or buy from the supplier? (Round your answer to 2 decimal places.) Total avoidable costs per unit Should Benson continue to make the product or buy it lrorn the supplier? _- Required A Required B Required C Suppose that Benson is able to increase sales by ?',000 units {sales will increase to 25,000 units}. Calculate the total avoidable costs. At this level of production, should Benson make or buy the cream? Total avoidable costs At this level of production. should Benson make or buy the cream