You currently make a part on old equipment at a cost of $50,000 per year and a variable cost of $20 / unit. you have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000/year. the following table summarizes the details of this make versus buy decision. alternative fixed cost variable cost buy $200,000 per year $15 per unit make $50,000 per year $20 per unit suppose now that there is a second outside supplier. this supplier asks a fixed cost of $170,000 per year, but is willing to negotiate about the variable cost. what variable cost level would entail that this second supplier is never going to be the best option?

Vortex company operates a retail store with two departments. information about those departments follows. department a department b sales $ 800,000 $ 450,000 cost of goods sold 497,000 291,000 direct expenses salaries 125,000 88,000 insurance 20,000 10,000 utilities 24,000 14,000 depreciation 21,000 12,000 maintenance 7,000 5,000 the company also incurred the following indirect costs. salaries $36,000 insurance 6,000 depreciation 15,000 office expenses 50,000 indirect costs are allocated as follows: salaries on the basis of sales; insurance and depreciation on the basis of square footage; and office expenses on the basis of number of employees. additional information about the departments follows. department square footage number of employees a 28,000 75 b 12,000 50 required: 1. determine the departmental contribution to overhead and the departmental net income for department a and department b.