UNIT COSTS:

Direct materials costs: $65

Direct labor costs: 30

Variable overhead costs: 15

Fixed overhead costs: 12

Total costs: $122

THE DROP DOWN BOX CONSISTS OF THE FOLLOWING FOR SAVINGS AND ADDITIONAL COSTS: cost of purhase, direct labor costs, direct materials costs, facility rental and other costs, fixed overhead costs, variable overhead costs

ALL YOU HAVE TO DO IS SELECT ONE OF THE OPTIONS I LISTED ABOVE FOR SAVINGS AND ADDITIONAL COSTS AND ENTER IN THE RELEVENT AMOUNT. I INCLUDED UNIT COSTS AS WELL.

Excellence Company manufactures gear model G37, which is used in several of its farm-equipment products. Annual production volume of G37 is 20,000 units. Unit costs for G37 are as follows: (Click the icon to view the unit costs.) Alternative Excellence can purchase gear model G37 from an outside supplier for $140 per unit. If G37 is outsourced, Excellence can use the facility where G37 is currently manufactured for production of another gear model G49. This would save Excellence S118,000 in facility rental and other costs presently incurred. Requirement Should Excellence make or buy G37? By how much will Excellence be better off by choosing your decision rather than the alternative? Should Excellence make or buy G37? By how much will Excellence be better off by choosing your decision rather than the alternative? Complete the following analysis of the cost to purchase the gear model G37. (Use a parentheses or minus sign to show a net additional cost of purchasing the G37. Leave unused cells blank. Item Relevant amount Savings: Additional costs: Total savings (additional costs)