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Sheridan Manufacturing Company currer of its products. The annual production Material cost Labor cost Overhead Batch-level set-up costs for the yea Product-level manager's salary Allocated facility-level costs ructuring Company currently manufactures a component used in one ne annual production costs for 5,000 components are as follows: $5 per unit $4 per unit $1 per unit $ 5,000 $18,000 $12,000 An outside company has offered to supply 5,000 units of the component for $13 1. T The company outsources the component, it will be able to rent out the Idled factory space for $1,000 per month but will not terminate the product manager. 1) Which items are not relevant to this outsourcing decision? 2) Identify any opportunity costs associated with this decision. 3) Prepare a quantitative analysis that indicates whether the component should be outsourced. 4) What qualitative factors should be considered in this decision? The Mendoza Company is trying that it uses to pack salsa a company is trying to decide whether to replace a packing machine ses to pack salsa into individual serving size packages. The following information is provided: Current Machine: Original cost $13,000 Accumulated depreciation 8,000 Annual operating costs 2,000 Current salvage value 2,000 Salvage value at the end of five years 500 New Machine: Cost $ 8,000 Annual operating costs 500 Salvage value at the end of five years 500 Required: 1) Compute the increase or decrease in total net income over the five-year period if the company chooses to buy the new machine

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