Helen Manufacturing must decide whether to insource or outsource a new toxic-free miracle carpet cleaner that works with its Miracle Carpet Cleaning Machine. If it decides to insource the product, the process would incur $300,000 of annual fixed costs and $1.15 per unit of variable costs. If it is outsourced, a supplier has offered to make it for an annual fixed cost of $90,000 and a variable cost of $1.95 per unit in variable costs.

a) Given these two alternatives, determine the indifference point (where total costs are equal). Indifference point______________

b) If the expected demand for the new miracle cleaner is 480,000 units, what would you recommend that Helen Manufacturing do? _____Insourcing______ is a cheaper alternative. The actual difference between the total costs of insourcing and outsourcing may be computed to be $_________.