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St. Jude Medical (SJM) manufactures two products: pacemakers and defibrillators. The company has a maximum capacity of 10,000 machine hours. Price and costs for each product are as follows: * Variable manufacturing overhead costs are applied at a rate of $400 per machine hour. A potential new client has offered $2,500 per unit to SJM for a special order of 250 defibrillators. These 250 units would incur the following production costs and time: Required: Assume that SJM has enough excess capacity to produce the special order. Should SJM accept the special order? Calculate the amount by which their income would increase or decrease if SIM accept the special order? SJM manufactures all of the components to make their defibrillators; however, the new factory supervisor has recommended that one component be purchased from an outside supplier in order to save money. The total costs to produce the component internally are as follows: The component can be purchased from an outside supplier for $248 per unit. Fixed costs will continue whether the components are produced internally or purchased from an outside supplier. No additional costs of purchasing will be incurred besides the purchase price. Required: Which alternative (make or buy) is more cost effective? Calculate the amount by which it is more cost effect