Question: Cullumber ProSystems needs a new signal conditioner module for a large process control system it is designing. Current market conditions will support annual sales of

Cullumber ProSystems needs a new signal conditioner module for a large process control system it is designing. Current market conditions will support annual sales of 1,220 systems. Engineers estimate the following unit manufacturing costs for the module: Engineers estimate that 30 weeks of development work will be needed to develop, test, and verify the new design. Engineering resources (personnel and lab) to complete the development will cost $8,900 per week. If the engineers don't work on this project, they will be assigned to another. Longan Devices has a module that is quite similar to the one Cullumber needs. Longan can modify the device to suit Cullumber in just four weeks and has offered to supply it to Cullumber at a price of $60 per unit. (b) If Cullumber decided to outsource the new module to Longan, how much would the other projects Cullumber's engineers work on have to return (or save) to make outsourcing financially beneficial? Savings/Returns from Cullumber project $
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