Question 7 . Herman Limited makes a product, P. It sells for $55 each. The sales budget for Year X. shows that the company expects to sell 4,000 units of P. ? The manufacturing cost per unit for the product in Year X is expected to be: ? The product is made in one cost centre, the conversion cost rate per hour being $14.80. The cost center budget for Year X is: 3 These budgets reflect the normal annual sales of P and of other products made in this cost centre. If the utilization of the cost centre falls to 60% on a regular basis, then one supervisor could be made redundant. A small local company, Ferris Limited, has offered to manufacture product P for $47 each. ? Required: 3 Prepare calculations to show whether P should be manufactured or purchased