QUESTION COMPLETION STATUS: SAVE ANSWER Question 53 5 points A manufaturer of digital sports cameras - Start Pro Ltd - has been approached by an external supplier with an offer to supply a particular component required in production. Start Pro Ltd currently manufactures this component in house and costs include: Total (100,000 components Price per component per year) Variable production $170,000 $1.70 costs Fixed production costs $130,000 $1.30 The external supplier has offered the component at a delivered price of $2.70 per unit. It would cost $13,500 p.a. to check externally purchased units for quality. If the component was bought from the external supplier, fixed production costs would be reduced by $16,000 p.a. The space vacated by area currently used to manufacture the components in house can be rented for $14,000 p.a. Required Compare the incremental costs and savings from acquiring the component from the external supplier and discuss whether the proposal to use the external supplier is acceptable on both financial and non-financial grounds. (5 Marks) 246 30,556 W