Rundle Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. Rundle produces a relatively small amount ( 15,000 units) of the cream and is considering the purchase of the product from an outside supplier for $5.40 each. If Rundle purchases from the outside supplier, it would continue to sell and distribute the cream under its own brand name. Rundle's accountant constructed the following profitability analysis: Required a. Identify the cost items relevant to the make-or-outsource decision, b. What is the avoidable cost per unit if the outsourcing decisign is taken? Should Rundle continue to make the product or buy it from the supplier? c. Suppose that Rundle is able to increase sales by 12,000 units (sales will increase to 27,000 units). Calculate the total avoidable costs. At this level of production, should Rundle make or buy the cream? a. Identify the cost items relevant to the make-or-outsource decision. b. What is the avoidable cost per unit if the outsourcing decision is taken? Should Rundle continue to make the product or buy it fror the supplier? c. Suppose that Rundle is able to increase sales by 12,000 units (sales will increase to 27,000 units). Calculate the total avoidable costs. At this level of production, should Rundle make or buy the cream? Complete this question by entering your answers in the tabs below. Identify the cost items relevant to the make-or-outsource decisidn. a. Identify the cost items relevant to the make-or-outsource decision. b. What is the avoidable cost per unit if the outsourcing decision is taken? Should Rundle continue to make the product or buy it from the supplier? c. Suppose that Rundle is able to increase sales by 12,000 units (sales will increase to 27,000 units). Calculate the total avoidable costs. At this level of production, should Rundle make or buy the cream? Complete this question by entering your answers in the tabs below. What is the avoidable cost per unit if the outsourcing decision is taken? Should Rundle continue to make the product or buy it from the supplier? Note: Round your answer to 2 decimal places. a. Identify the cost items relevant to the make-or-outsource decislon, b. What is the avoidable cost per unit if the outsourcing decision is taken? Should Rundle continue to make the product or buy it from the supplier? c. Suppose that Rundle is able to increase sales by 12,000 units (sales will increase to 27,000 units). Calculate the total avoidable costs. At this level of production, should Rundle make or buy the cream? Complete this question by entering your answers in the tabs below. Suppose that Rundle is able to increase sales by 12,000 units (sales will increase to 27,000 units). Calculate the total avoidable costs. At this level of production, should Rundle make or buy the cream
