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One of Current Designs' competitive advantages is found in the ingenuity of its owners and CEO, Mike Cichanowski. His
involvement in the design of kayak molds and production techniques has led to Current Designs being recognized as an
industry leader in the design and production of kayaks. This ingenuity was evident in an improved design of one of the
most important component of a kayak, the seat. The "Revolution Seating System" is one-of-a-kind, rotating axis seat
that gives unmatched, full contact, under-leg support. It is quickly adjustable with a lever-lock system that allows for a
customizable seat position that maximizes comfort for the rider.
Having just designed the "Revolution Seating System", Current Designs must now decide whether to produce the seats
internally or buy them from an outside supplier. The costs for Current Designs to produce the seats are as follows.
	Direct materials		$20/unit		Direct labor		$15/unit
	Variable overhead		$12/unit		Fixed overhead		$20,000
Current Designs will need to produce 3,000 seats this year; 25% of the fixed overhead will be avoided if the seats are
purchased from an outside vendor. After soliciting prices from outside suppliers, the company determined that it will
cost $50 to purchase a seat from an outside vendor.
Instructions
(a)	Prepare an incremental analysis showing whether Current Designs should make or buy the "Revolution Seating
	System."
(b)	Would your answer in (a) change if the productive capacity released by not making the seats could be used to
	produce income of $20,000?

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