Differential analysis and decision making (TOTAL: 25 Marks) a The constraint at Shanghai Company is an expensive milling machine. The three products listed below use this constrained resource. Selling price per unit Variable cost per unit Time on the constraint (minutes) Red $85 $45 1.30 Green $195 $155 2.70 Blue $70 $30 1.10 Required (show your calculations): i. Rank the products in order of their current profitability from the most profitable to the least profitable (8 marks) i Assume that sufficient constraint time is available to satisfy the demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource. Explain your answer (7 marks) b. Switzerland Machinery Limited uses 7500 units of Part X each year as a component in assembling one of its products. The company is presently producing Part X intemally at a total cost of $110,000 as follows Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Total costs $22.000 32,000 17.000 39,000 $110.000 An outside supplier has offered to provide Part X at a price of $15 per unit. If the company stops producing the part internally, one-third of the fixed manufacturing overhead would be eliminated Required (show your calculations): Prepare an analysis showing the annual advantage or disadvantage of accepting the outside supplier's offer (10 marks)