s related P7.49B (LO 2, 3) The management of Dunham Manufacturing Company has asked for your help in deciding whether to continue manufacturing a part Tropica, is a component of Dunham's finished product. onsider or to buy it from an outside supplier. The part, called y An analysis of the accounting records and the production data revealed the following information for the year ending December 31, 2020: 1. The machinery department produced 40,000 units of Tropica. Prob 2. Each Tropica unit requires 15 minutes to produce. Three people in the machinery department work full-time (2,500 hours per year each) producing Tropica. Each person is paid $15 per hour. 3. The cost of materials per Tropica unit is $3. 4. Manufacturing costs directly applicable to the production of Tropica are a $6,000; utilities, $1,500; depreciation, $2,000; property taxes and insurance, $2,000. All of the costs will be eliminated if the company purchases Tropica. as follows: indirect labour, 5. The lowest price for Tropica from an outside supplier is $6 per unit. Freight charges would be S0.50 per unit, and the company would require a part-time receiving clerk at $10,000 per year. 6. If it purchases Tropica, Dunham will use the excess space that becomes available to store its fin- ished product. Currently, Dunham rents storage space at approximately $1.50 per unit stored per year. It stores approximately 6,000 units per year in the rented space. Instructions buy the a. NI decrea incremental analysis for the make-or-buy decision. Should Dunham make or a. Prepare part? Why? an b. NI decrea b. Prepare produce $15.000 of net income in addition to the savings on the rental of storage space, What deci- an incremental analysis, assuming the released facilities (freed-up space) can be used to sion should the company make now? c. What non-financial factors should it consider in the decision? Determine w sehold Products Co. is a diversified household-cleaner processing ducts from a common set of chemical com- be sold or p