Direct Materials Materials handling (10% of materials cost) Direct labor Manuracturing overhead (120% of direct labor...

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Direct Materials Materials handling (10% of materials cost) Direct labor Manuracturing overhead (120% of direct labor cost) Total Manufacturing Cost $320 32 180 216 $748 Materials handling, which is not included in manufacturing overhead, represents the direct variable costs of the receiving department that are applied to direct materials and purchased components on the basis of their cost. Blackspire's annual manufacturing overhead budget is one-third variable and two-thirds fixed. Wellspring, one of Blackspire's reliable vendors, has offered to supply "Golden Key N3" at a unit price of $630 Required 1. If Blackspire Construction purchases the 200 "Golden Key N3" units from Wellspring, the capacity Blackspire used to manaufacture these parts would be idle. Should Blackspire make or buy the component? What is the cost difference per unit to buy the part? 2. Assume Blackspire Construction is able to rent all idle capacity for $25,000 per month. If Blackspire decides to purchase the 200 units from Wellspring, what is Blackspire's change in monthly cost for "Golden Key N3"? 3. Assume the rental opportunity does not exist. What is the minimum price Blackspire Construction would be willing to pay Wellspring if Blackspire requires a $15,000 savings a month before buying from an outside vendor? Direct Materials Materials handling (10% of materials cost) Direct labor Manuracturing overhead (120% of direct labor cost) Total Manufacturing Cost $320 32 180 216 $748 Materials handling, which is not included in manufacturing overhead, represents the direct variable costs of the receiving department that are applied to direct materials and purchased components on the basis of their cost. Blackspire's annual manufacturing overhead budget is one-third variable and two-thirds fixed. Wellspring, one of Blackspire's reliable vendors, has offered to supply "Golden Key N3" at a unit price of $630 Required 1. If Blackspire Construction purchases the 200 "Golden Key N3" units from Wellspring, the capacity Blackspire used to manaufacture these parts would be idle. Should Blackspire make or buy the component? What is the cost difference per unit to buy the part? 2. Assume Blackspire Construction is able to rent all idle capacity for $25,000 per month. If Blackspire decides to purchase the 200 units from Wellspring, what is Blackspire's change in monthly cost for "Golden Key N3"? 3. Assume the rental opportunity does not exist. What is the minimum price Blackspire Construction would be willing to pay Wellspring if Blackspire requires a $15,000 savings a month before buying from an outside vendor?