Need help with the following questions:

1). Tony's Electronics Corporation needs 12,000 units of a certain part to be used in the production of its karaoke machines. If Tony's Electronics buys the part from Scott Company instead of making it, Tony's could not use the present facilities for another manufacturing activity. Sixty percent of the fixed overhead applied will continue regardless of what decision is made. The following quantitative information is available regarding the situation presented:

Cost to make the part:

Direct materials Rs. 250

Direct labor 1,250

Variable overhead600

Fixed overhead applied 750

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Rs.2,850

Cost to buy the part: Rs.2,250

A. In deciding whether to make or buy the part, what are Tony's total relevant costs to make the part?

B. Which alternative (make or buy) is more desirable for Tony's and by what amount?

C. Suppose that Tony's Electronics Corporation is in an area of the country with high unemployment and that it is unlikely that displaced employees will find other employment. How might that affect your decision?

2.Machine hours and electricity costs for AMK Industries for the past eleven months were as follows:

MonthMachine HoursElectricity Costs

January2,000Rs.18,900

February2,40021,500

March1,40014,000

April2,60023,500

May3,30028,750

June3,30022,700

July3,60025,250

August3,00023,250

September1,50016,000

October3,30026,500

November4,20031,500

Required:

a.Using the high-low method, develop an estimate of variable electricity costs per

machine hour.

b.Using the high-low method, develop an estimate of fixed electricity costs per month.

c.Using the high-low method, develop a cost function for monthly electricity costs.

d.Estimate electricity costs for a month in which 1,300 machine hours are worked.

Thanks!