Restaurant Supplies 'R' Us makes and sells varying supplies for several restaurant chains across the island....

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Restaurant Supplies 'R' Us makes and sells varying supplies for several restaurant chains across the island. One of its divisions produces dinner forks. The company's chief accountant recently prepared the following cost statement of the annual production expenses associated with the division: Variable Production Expenses: Materials Costs (50,000 x $150.00) 7,500,000 Labour Costs (50,000 x $200.00) 10,000,000 Variable Manufacturing Overhead (50,000 x $80.00) 4,000,000 Fixed Production Expenses: Salary of Production Supervisor 4,100,000 100,000 Depreciation of Production Equipment Total Costs Restaurant Supplies 'R' Us has an opportunity to buy the 50.000 forks it currently makes from a reliable competing manufacturer for $500.00 each. The product meets Restaurant Supplies 'R' Us quality standards. Restaurant Supplies 'R' Us would have to pay the shipping expenses from the manufacturer to its plant at a rate of $2.00 per fork. Also, one third of all fixed production expenses continue regardless of the decision made. Required: Should Restaurant Supplies 'R' Us make or buy forks? Explain why or why not. 25,700,000 Restaurant Supplies 'R' Us makes and sells varying supplies for several restaurant chains across the island. One of its divisions produces dinner forks. The company's chief accountant recently prepared the following cost statement of the annual production expenses associated with the division: Variable Production Expenses: Materials Costs (50,000 x $150.00) 7,500,000 Labour Costs (50,000 x $200.00) 10,000,000 Variable Manufacturing Overhead (50,000 x $80.00) 4,000,000 Fixed Production Expenses: Salary of Production Supervisor 4,100,000 100,000 Depreciation of Production Equipment Total Costs Restaurant Supplies 'R' Us has an opportunity to buy the 50.000 forks it currently makes from a reliable competing manufacturer for $500.00 each. The product meets Restaurant Supplies 'R' Us quality standards. Restaurant Supplies 'R' Us would have to pay the shipping expenses from the manufacturer to its plant at a rate of $2.00 per fork. Also, one third of all fixed production expenses continue regardless of the decision made. Required: Should Restaurant Supplies 'R' Us make or buy forks? Explain why or why not. 25,700,000