The Camel Company produces 10,000 units of item Roto 454 annually at a total cost of $190,000.
Direct materials $ 20,000
Direct labor 55,000
Variable overhead 45,000
Fixed overhead 70,000
Total $ 190,000
The Yukon Company has offered to supply 10,000 units of Roto 454 per year for $18 per unit. If Camel accepts the offer, $4 per unit of the fixed overhead would be saved. In addition, some of Camel's facilities could be rented to a third party for $15,000 per year.
Required:
1. What are the relevant costs for the "make" alternative?

David consumes two things: gasoline (g) and bread (b). david's utility function is u(g, b) = 10g^0.25 b^0.75. use the lagrange technique to solve for david's optimal choices of gasoline and bread as a function of the price of gasoline, p_g, the price of bread, p_b, and his income m. with recent decrease in the price of gasoline (maybe due to external shock such as shale gas production) does david increase his consumption of gasoline? for david, how does partial differential g/partial differential p_g depend on his income m? that is, how does david's change in gasoline consumption due to an increase in the price of gasoline depend on his income level? to answer these questions, find the cross-partial derivative, |partial differential^2 g/partial differential m partial differential p_g.