The Summer Corporation manufactures cellular modems. It manufactures its own cellular modem circuit boards (CMCB), an important part of the cellular modem. It reports the following cost information about the costs of making CMCBs in 2020 and the expected costs in 2021:

Data table

	Current Costs in 2020	Expected Costs in 2021
Variable manufacturing costs
Direct material cost per CMCB	$175	$188
Direct manufacturing labor cost per CMCB	55	27
Variable manufacturing cost per batch for setups, materials
handling, and quality control	1,700	1,500
Fixed manufacturing cost
Fixed manufacturing overhead costs that can be avoided if CMCBs
are not made	960,000	75,000
Fixed manufacturing overhead costs of plant depreciation,
insurance, and administration that cannot be avoided even if
CMCBs are not made	960,000	325,000

More info

Summer manufactured 12,000 CMCBs in 2020 in 60 batches of 200 each. In 2021, Summer anticipates needing 2,500 CMCBs. The CMCBs would be produced in 20 batches of 125 each. The Michigan Corporation has approached Summer about supplying CMCBs to Summer in 2021 at $440 per CMCB on whatever delivery schedule Summer wants.

Requirement 1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2021.

	Total Manufacturing	Manufacturing
	Costs of CMCB	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	$?	$?

Requirement 2: Suppose the capacity currently used to make CMCBs will become idle if Summer purchases CMCBs from Michigan. On the basis of financial considerations alone, should Summer make CMCBs or buy them from Michigan?

Show your calculations.

	Make		Buy
	Total	Per Unit	Total	Per Unit
Purchase cost			$?	$?
Direct materials	?	?
Direct manufacturing labor	?	?
Variable batch manufacturing costs	?	?
Avoidable fixed manufacturing costs	?	?
Total relevant costs	$?	$?	$?	$?

Requirement 3. Now suppose that if Summer purchases CMCBs from Michigan, its best alternative use of the capacity currently used for CMCBs is to make and sell special circuit boards (CB3s) to the Easy Corporation. Summer estimates incremental revenues from selling CB3s to be $1,900,000, and incremental costs from making CB3s to be $2,125,000. On the basis of financial considerations alone, should Sunbeam make CMCBs or buy them from Marley?

Show your calculations. (Complete all input fields. For amounts with a $0 balance, make sure to enter "0" in the appropriate cell.)

	Choices for Summer
Relevant Items	Make CMCBs and Do Not Make CB3s	Buy CMCBs and Do Not Make CB3s	Buy CMCBs and Make CB3s
Total incremental costs of making/buying CMCBs (from requirement 2)	$?	$?	$?
Excess of future costs over future revenues from CB3s	?	?	?
Total relevant costs	$?	$?	$?