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Atte 11 Use the following information to answer Question 1 through Question 6. Outsourcing Inc, currently produces all the parts it needs for its one product - Product A The following information has been gathered when 10,000 units of Product A were made. Per-Unit Total $20,000 Direct Materials $2.00 Direct Labor 10,000 1.00 0.50 1.50 6.00 Unit-related overhead 5,000 Bacterial-related overhead 15,000 Facilities-sustaining overhead 60.000 Unit-related selling expenses 3,000 Facilities sustaining administrative 25,000 Total $138,000 0.30 2.50 $13.80 A supplier has offered to provide Outsource with one of the parts it needs for $1.40 per unit. If Outsource accepts the supplier's offer, its direct materials cost will decrease by 30%, its direct labor cost will decrease by 40%, and its unit-related overhead will decrease by 20%. No other costs will change. 5. Based solely on your differential analysis and assuming Outsourcing Inc. would use the released space to produce Product B if it buys the part for the supplier, should Outsource Inc. buy the part from the supplier or continue to make the part? (2 points) Your company issues $800,000, 6%, 15-year bonds that pay interest annually. If the market rate is 7%, what is the issue price of the bonds? i/y - PV - p/y = n = pmt = FV

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