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Suny produces chairs. This year's expected production is 25,000 ntly, Sullivan makes the upholstery for the chairs in its factory. Sullivan's management reports the following

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Suny produces chairs. This year's expected production is 25,000 ntly, Sullivan makes the upholstery for the chairs in its factory. Sullivan's management reports the following costs for the upholstery for the 25,000 chairs: Sultivan has received an offer from an outside wondor to supply the uphoistery for the aviencthe information) chairs Sulivan requires at $10.00 per chair. Read the coquirements. Requirements 1. Assume that if the outside vondor supplies the upholstery, the facily where the upholstery is currently made will remain idie, On the basis of financial considerations alone, should Sulivan accept the outside vondor's offer at the anticipated volume of 25,000 chairs? Show your calculations. 2. For this question, assume that if the upholstery is purchased cutside, the avaitable unused taciffes wil be used to make plitows to match the chairs. Each pillow sells for \$2d with a variable cost of \$21. No cher costs would change and the compary expects to sell 10,000 pillows On the baes of financial consderations alone, ahould Sultivan make or buy the upholstery for their chairs, assuming that 25,000 chairs are produced (and sold)? Show your calculations. 3. The sales manager at Sullivan is concerned that the estimate of 25,000 chairs may be high and beleves that only 21,000 chairs wil be sold. Production will be cut back, freeing up work space. This apace can be use to make 10,000 pillows whether Sultivan buys the upholstery or makes s in house. On the basis of financial considerations alone, should Sulivan purchase the upholstery from the outside vendor? Show your calculations Data table Requirement 1. Assume that if the outside vendor supplies the upholstery, the feclity where the upholstery is currently made will remain idle. On the basis of financlat consideraficns alone, ahould Sulivan accept the outside vendor's offer at the anticipated volume of 25,000 chairs? Show your calculations, of an input fieid ia not used in the table, leave the input field emptr, do not enter a zero. On the basis of financial conviderations alone, should Sulivan accept the outside vendors offer at the anteipated volume of 25,000 charn? Sulivan accept the outuide vendor's ofler at the antecipated volume of 25.000 chers. Requirement 2. For this question, assume that if the upholstery is purchased outside, the avalable unused tacilfies wil be used to make pillows to match the chairs. Each pillow costs $28 with a variable cost of $21. No other costs would change and the company expects to sell 10,000 pillows. On the basis of financial considerations alone, ahould Sulivan make or buy the upholsery for their chairs, assuming that 25,000 chairs are produced (and sold)? Show yout calcutations. (Enter any deductions with a partentheies or a minus sign. If an input field is not used in the table, leave the irput field empty; do not enter a zero.) On the basis of financial considerabion abone, shoubd fullivan make or buy the upholatery, assuming that 25,000 chairs are produced (and sold? Shitivan thould the ucholatery, assurving that 25.000 chars we produced (and sold) Requirement 3. The sales manager at Sullivan is concerned that the estimate of 25,000 chairs may be high and believes that only 21,000 chars will be sold, Production wil be cut back, freeng uf work space. This space can be Isse to make 10,000 pillows whether Sulityan buys the upholstery or makes it in-house. On the basis of francial considerations alone, should Sullivan purchase the upholstery from the outside vendor? Show your calculations. (If an ingut field is not used in the table, leave the inout fleld empty, do not enter a zero) On the basis of Inancial considerations alone, should Sultivan purchase the upholstery from the outsibe vender? Sutivan purchase the ugholstery from the cutside vendoe

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