Part 2 10 MARKS Intuit has discovered that a small fitting unit it now manufactures at a total cost of $1.00 per unit could be bought elsewhere for $0.87 per unit. Of its total cost per unit, fixed costs amount to $0.20 per unit, of which $0.05 per unit can be eliminated or avoided if Intuit buys this unit. Intuit needs 460,000 of these units each year. If Intuit decides to buy rather than produce the small fitting, it can devote the machinery and labor to making a timing unit it now buys from another company, saving the company $10,000. Required: Given the information above: a) Without considering the possibility of making the timing unit, evaluate whether Intuit should buy or continue to make the small fitting. 7 Marks b) Considering the possibility of making of the timing unit (opportunity cost), would your decision from a) change? 3 MarksIntuit Corporation is considering various business opportunities. It wants to make the best use of its production facilities to maximize income. Part 1 10 MARKS Intuit mass-produces a unit that it normally sells for $3.90. It sells approximately 35,000 of these units each year. The variable costs for each unit are as follows: Manufacturing costs $1.50 Selling costs $0.80 A foreign company has offered to purchase 15,000 of these units at $2.60 per unit. The production of these units is near full capacity at Intuit, so to accept this offer would require Intuit temporarily adding another shift to its production line. To do this would increase variable manufacturing costs by $0.30 per unit. However, variable selling costs would be reduced by $0.20 a unit. Intuit will also incur additional fixed costs of $1,000. Required: Given the information above: a) Should Intuit accept this special order from the foreign buyer? 10 Marks