Q1. Make vs Buy King Company makes 80,000 units of Part R2-D2 each year. At this...

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Q1. Make vs Buy King Company makes 80,000 units of Part R2-D2 each year. At this level of activity, the cost per unit for Part R2-D2 is: Direct Materials Direct Labour $7.00 9.00 Variable mfg overhead 4.00 Fixed mfg overhead 10.00 Total Cost per Part $30.00 An outside supplier has offered to sell 80,000 units of Part R2- D2 each year to King for $25.00 per part. If King accepts the offer, the facilities currently used to make R2-D2 can be rented out to another company for $120,000 per year. King has calculated that $7 of the fixed manufacturing overhead being applied to R2-D2 would continue even if the part is purchased from the outside supplier. REQUIRED: How much will profit change if the outside offer is accepted. Q1. Make vs Buy King Company makes 80,000 units of Part R2-D2 each year. At this level of activity, the cost per unit for Part R2-D2 is: Direct Materials Direct Labour $7.00 9.00 Variable mfg overhead 4.00 Fixed mfg overhead 10.00 Total Cost per Part $30.00 An outside supplier has offered to sell 80,000 units of Part R2- D2 each year to King for $25.00 per part. If King accepts the offer, the facilities currently used to make R2-D2 can be rented out to another company for $120,000 per year. King has calculated that $7 of the fixed manufacturing overhead being applied to R2-D2 would continue even if the part is purchased from the outside supplier. REQUIRED: How much will profit change if the outside offer is accepted.