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Question: MMM Inc. (the company) manufactures ladders. One of their divisions manufactures a step which are used in several of their ladders. They produce 9,000 steps annually. The cost per unit for the step is as follows: Per Unit Description Cost Direct materials $7.10 Direct labour $2.30 Variable overhead $2.80 Fixed overhead $10.20 Total cost $22.40 Of the total fixed overhead assigned to the steps, $81,000 is directly traceable to the production of the steps. The remaining fixed overhead costs are common fixed overhead and therefore unavoidable Of the total fixed overhead assigned to the steps, $81,000 is directly traceable to the production of the steps. The remaining fixed overhead costs are common fixed overhead and therefore unavoidable. An outside supplier has offered to sell the liners to the company for $21.75 per unit. Required: Analyze the above information and determine if the company should make or buy the steps. If there was no other alternative use for the facilities that is currently used to produce the steps, should the company make or buy the steps? Enter one of the following in the space provided: M for make, B for buy, or NA for indifferent M A/ What is the most that the company would be willing to pay an outside supplier for one step? What is the most that the company would be willing to pay an outside supplier for one step? 9.25 A If the company buys all of their steps from the supplier, would their operating income increase, decrease, or stay the same? Enter one of the following in the space provided: IN for increase, DE for decrease, and NA for stay the same. DE A If the company buys all of their steps from the supplier, by how much would their operating income change? Enter your answer as a positive number. 9500 If the company could rent out the space that is currently used to produce the steps for $34,000 per year, should the company make or buy the steps? 9500 AM If the company could rent out the space that is currently used to produce the steps for $34,000 per year, should the company make or buy the steps? Enter one of the following in the space provided: M for make, B for buy, or NA for indifferent M A/ If the company buys the steps from the supplier and then rents out the space that is currently used to produce the steps for $34,000 per year, by how much would their operating income change? Enter your answer as a positive number. 6500 A/