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1. Yard Gnome Corp manufactures garden tools in a factory in Taneytown, Maryland. Recently, the company designed a collection of tools for professional use rather than consumer use. Management needs to make a good decision about whether to produce this line in their existing space in Maryland, where space is available or to accept an offer from a manufacturer in Taiwan. Data conceming the decision are: (Click the icon to view the data.) Read the requirements2 Requirement 1. Should Yard Gnome Corp manufacture the 670,000 garden tools in the Maryland facility or purchase them from the supplier in Taiwan? Explain. The cost of manufacturing 670,000 garden tools in the Maryland faci lity is $ 2,075,500 and the cost of purchasing 670,000 garden tools from the Taiwan supplier is 1,675,000 purchase the garden tools from the Taiwan supplier because it is $ should 400,500 less Yard Gnome Corp than the relevant costs to manufacture the garden tools in Maryland. Requirement 2. Yard Gnome Corp believes that the U.S. dollar may weaken in the coming months against the New Taiwanese Dollar and does not want to face any currency risk. Assume that Yard Gnome Corp can enter into a forward contract today to purchase 20,500 NTD for $4.30. Should Yard Gnome Corp manufacture the 670,000 garden tools in the Maryland facility or purchase them from the Taiwan supplier? Explain. manufacture the garden tools in Maryland because the relevant costs of $ should 2,075,500 Yard Gnome Corp to manufacture th garden tools in Maryland is less than the cost of $ 2,881,000 to purchase them. Requirement 3. What are some of the qualitative factors that Yard Gnome Corp should consider when deciding whether to outsource the garden tools manufacturing to Taiwan?(Select four that apply.) Em (3) Fluctuations in the value of the NTD relative to the US dolar (4) Delivery lead times and morale in the Taiwanese f 1: Data Table Expected annual sales of garden tools (in units) Average selling price of tools Price quoted by Taiwanese company, in New Taiwanese Dollars (NTD) Current exchange rate Variable manufacturing oosts Incremental annual fixed manufacturing costs associated with the new product line Variable selling and distribution costs Annual fixed selling and distribution costs a Selling and distribution costs are the same regardless of whether the tools are manufactured in Maryland or imported 670,000 $10.5 20,500 8,200 NTD $1 $2.65 per unit $300,000 $0.55 per unit $315,000

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