The Engine Guys produces specialized engines for "snow climber" buses. The company's normal monthly production volume is 9000 engines, whereas its monthly production capacity is 18,000 engines. The current selling price per engine is $1,300. The cost per unit of manufacturing and marketing the engines at the normal volume is as follows: Costs per Unit for Engines $ 108 2es 34 208 Manufacturing costs: Direct materials Direct labour Variable overhead Fixed overhead Subtotal Marketing costs: Variable Fixed Subtotal Total unit cost $ 558 $ 65 143 208 $ 766 Required: Answer the following independent questions 1- The Provincial Bus Company wishes to purchase 740 engines in October. The bus company is willing to pay a fixed fee of $1080,000 and reimburse The Engine Guys for all manufacturing costs incurred to manufacture 740 motors October is a busy month for The Engine Guys, and there are sufficient orders to operate at 100% capacity utilization. There will be no variable marketing costs on this government contract Compute the incremental benefit of the contract 2-0. An outside contractor is willing to supply 4,500 engines at a price of $624 per unit. If the offer is accepted, the company will make 4.500 engines in-house and buy 4.500 engines from the contractor. The company's fixed manufacturing costs will decline by 20% and the variable marketing costs per unit on the 4,500 engines purchased will decline by 40% Calculate the cost in each option. (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required.) Buy 4,500 units and make 4,500 units Make 9.000 units Purchase cost Variable manufacturing Fored manufacturing Variable marketing Foxed marketing Cost of option Difference in favour of make opbon 0 2-5. Determine whether the contractor's offer should be accepted? Yes NO