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Mave-or-iry Dedsion Arches Manufacturiog had atways made as components in-house. Honeve, Capyonlands Component Wotks had recently oftered to supply one component, DA, at a price of s13 each, Arches wese 4,100 inits of cemporent DA each yese the cost per unit of this component is as follows: The fixad overhead is an zlocates expensel none of a would be eliminated if produttion of component oA wopped. Required: 1. What are the alternatives focing Arches Manufacturing wath respect to production of eomponent on? 2. bit the reicvant costs for each aternstive. If required, round your answers to the nearest cent. If Arches decides to purchase the component from Canyonlands, by how much will operobng inoome increase or decrease (as compared to making the component in-house)? 3. Conceptual Conescion: Which aternative is better? Arches Manufacturing had always made its components in-house. However, Canyonlands Component Works had recently offered to supply one component, component DA each year. The cost per unit of this component is as follows: The fixed overhead is an allocated expense; none of it would be eliminated if production of component DA stopped. Required: 1. What are the alternatives facing Arches Manufacturing with respect to production of component DA ? 2. List the relevant costs for each alternative. If required, round your answers to the nearest cent. If Arches decides to purchase the component from Canyoniands, by how much will operating income increase or decrease (as compared to making the compane 3. Conceptual Connection: Which alternative is better? components in-house. However, Canyoniands Component Works had recently offered to supply one component, DA, at a price of \$13 each. Arches uses 4 , 100 units of it of this component is as follows: se; none of it would be eliminated if production of component DA stopped. Manufacturing with respect to production of component DA? hative. If required, round your answers to the nearest cent. Jonent from Canyoniands, by how much will operating income increase or decrease (as compared to making the component in-house)? native is better

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