Exercise $6-13$A $($Algo$)$ Outsourcing decision affected by opportunity costs LO $6-3$

Rooney Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing $9,300$ containers follows.

Unit$-$level materials $ $5,100$

Unit$-$level labor $6,700$

Unit$-$level overhead $3,400$

Product$-$level costs$*8,700$

Allocated facility$-$level costs $27,500$

$*$One$-$third of these costs can be avoided by purchasing the containers.

Russo Container Company has offered to sell comparable containers to Rooney for $$2\mathrm{.}50$ each.

Required

Calculate the total relevant cost. Should Rooney continue to make the containers?

Rooney could lease the space it currently uses in the manufacturing process. If leasing would produce $$12,300$ per month, calculate the total avoidable costs. Should Rooney continue to make the containers?