The Sunshine 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 2017 and the expected costs in 2018:

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

2. Suppose the capacity currently used to make CMCBs will become idle if Sunshine purchases CMCBs from Marrow.On the basis of financial considerations alone, should Sunshine make CMCBs or buy them from Marrow? Show your calculations

3. Now suppose that if Sunshine purchases CMCBs from Marrow, its best alternative use of the capacity currently used for CMCBs is to make and sell special circuit boards (CB3s) to the Excite Corporation. Sunshine estimates the following incremental revenues and costs from CB3s:

Total expected incremental future revenues $2,100,000

Total expected incremental future costs $2,220,000

On the basis of financial considerations alone, should Sunshine make CMCBs or buy them from Marrow? Show your calculations.

Current Costs Expected Costs in 2017 in 2018 Variable manufacturing costs Direct material cost per CMCB 170 $ 160 29 Direct manufacturing labor cost per CMCB 35 Variable manufacturing cost per batch for setups, materials handling, and quality control 1,800 1,300 Fixed manufacturing cost Fixed manufacturing overhead costs that can be avoided if CMCBs 225,000 are not made 320,000 Fixed manufacturing overhead costs of plant depreciation, insurance, and administration that cannot be avoided even if 400,000 280,000 CMCBS are not made Current Costs Expected Costs in 2017 in 2018 Variable manufacturing costs Direct material cost per CMCB 170 $ 160 29 Direct manufacturing labor cost per CMCB 35 Variable manufacturing cost per batch for setups, materials handling, and quality control 1,800 1,300 Fixed manufacturing cost Fixed manufacturing overhead costs that can be avoided if CMCBs 225,000 are not made 320,000 Fixed manufacturing overhead costs of plant depreciation, insurance, and administration that cannot be avoided even if 400,000 280,000 CMCBS are not made