Taylor Company manufacturers cellular modems. They make their own cellular modem circuit boards (CMCBs), a key component of their modems. The following info is about the costs of making CMCBs in 2017 and the expected costs in 2018.

Taylor manufactured 8000 CMCBs in 2017 in 40 batches of 200 each. For 2018, they anticipate 10,000 CMCBs. The CMCBs would be produced in 80 batches of 125 each. The Essex corp is offering to sell CMCBs to Taylor for $300 per CMCB.

For each requirement, please answer all blank boxes:

Requirement 1. Calculate the total expected manufacturing cost per unit for making CMCBs in 2018.

Requirement 2. Suppose the capacity currently used to make CMCBs becomes idle if Taylor buys CMCBs from Essex. On the basis of financial considerations alone, should Taylor make CMCBs or buy them from Essex? Show calculations below. If a box isn't used leave it blank (no zeroes).

Requirement 3. If Taylor buys CMCBs from Essex, its best alternative use of the capacity currently used to make CMCBs is to make and sell special circuit boards called CB3s to Minton corp. Taylor estimates incremental revenues from selling CB3s at $2,000,000 and incremental costs of making CB3s at $2,150,000. On the basis of financial considerations alone, should Taylor make CMCBs or buy them from Essex? Show calculations below. Enter zero for boxes with zero balance.

Current Costs Expected Costs in 2017 in 2018 Variable manufacturing costs 99 Direct material cost per CMCB Direct manufacturing labor cost per CMCB 8 Variable manufacturing cost per batch for setups materials handling, and quality control Fixed manufacturing cost Fixed manufacturing overhead costs that can be avoided if CMCBS are not made 320,000 320 000 Fixed manufacturing overhead costs of plant depreciation. insurance and administration that cannot be avoided even if CMCBs are not made 800,000 800 000 Total Manufacturing Costs of CMCB Manufacturing Cost per Unit Direct materials Direct manufacturing labor Variable batch manufacturing costs Fixed manufacturing costs Avoidable fixed manufacturing costs Unavoidable fixed manufacturing costs Total manufacturing costs Total Per Unit Total relevant costs Make CMCBs Buy CMCBs Buy CMCBs and Do Not and Make and Do Not Make CB3s Relevant Items Make CB3s CB3s Total incremental costs of making/buying CMCBs (from requirement 2) Excess of future costs over future revenues from CB3s Total relevant costs