Q7. National Hospitality Supply Co. has traditionally manufactured a number of different standard items for hotels...

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Q7. National Hospitality Supply Co. has traditionally manufactured a number of different standard items for hotels and motels. It is now exploring an outsourcing decision for Coffe Machine that it currently produces. Cost information for one such machine part is given below: Variable cost/unit Fixed manufacturing costs (total) Allocated corporate overhead Unit product cost (based on 500 units) Fifty percent of the fixed manufacturing costs are directly traceable to this specific machine and therefore avoidable. An outside supplier will sell the Machine at a price of $42 per unit if 500 units are purchased. Purchase Variable cost Fixed Required: a). Prepare an analysis of whether National Hospitality Supply Co. continues to manufacture Coffee Machine or whether it should purchase them from the outside supplier (Negative amounts should be indicated by a minus sign. Round "Per Unit" to 2 decimal places.) manufacturing overhead Common costs Per unit $ 29.50 5,160.00 6,330.00 52.48 Make $ 500 units Buy Difference Q7. National Hospitality Supply Co. has traditionally manufactured a number of different standard items for hotels and motels. It is now exploring an outsourcing decision for Coffe Machine that it currently produces. Cost information for one such machine part is given below: Variable cost/unit Fixed manufacturing costs (total) Allocated corporate overhead Unit product cost (based on 500 units) Fifty percent of the fixed manufacturing costs are directly traceable to this specific machine and therefore avoidable. An outside supplier will sell the Machine at a price of $42 per unit if 500 units are purchased. Purchase Variable cost Fixed Required: a). Prepare an analysis of whether National Hospitality Supply Co. continues to manufacture Coffee Machine or whether it should purchase them from the outside supplier (Negative amounts should be indicated by a minus sign. Round "Per Unit" to 2 decimal places.) manufacturing overhead Common costs Per unit $ 29.50 5,160.00 6,330.00 52.48 Make $ 500 units Buy Difference