QUESTION 6 Three Stars, Inc. manufactures prefabricated houses. The rm's president is interested in determining whether it would be better to manufacture the doors used in the houses or to buy them from a supplier. A manufactured door costs $120 at the current volume of 500 doors, and there is supplier who is willing to provide them for $55,000 in total. The following is the internal breakdown of the $120 cost: Direct materials, $35 Variable Labor, $50 Variable Overhead, $10 Administrative salaries, $7 (allocated corporate overhead) Property taxes, $2 (allocated corporate overhead) Insurance, $5 (allocated corporate overhead) Utilities, $5 (allocated plant overheads, mixed cost) Miscellaneous (allocated plant overhead, xed) If the doors are outsourced, all corporate overheads are expected to rermin the same because the doors aren't a large enough component to impact corporate costs. The plant manager has identied $2500 in total of allocated plant overheads that could be saved if the doors are outsourced. What is the net savings (cost) of outsourcing the doors? t" The company will lose $5,000 in total if they outsource the doors. f\" The company will have $5 ,000 savings in total if they outsource. t\" The company will lose $12,500 in total 'om outsourcing the order. t\" The company will lose $15 per door if they outsource. 1 andA