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Oriole Water Co. is a leading producer of greenhouse irrigation systems. Currently, the company manufactures the timer unit used in each of its systems. Based on an annual production of 47,500 timers, the company has calculated the following unit costs. Direct fixed costs include supervisory and clerical salaries and equipment depreciation. $13 5 4 Direct materials Direct labor Variable manufacturing overhead Direct fixed manufacturing overhead Allocated fixed manufacturing overhead Total unit cost 10 (30% salaries, 70% depreciation) 6 $38 Clifton Clocks has offered to provide the timer units to Oriole at a price of $ 34 per unit, if Oriole accepts the offer, the current timer unit supervisory and clerical staff will be laid off. (21) Your answer is correct. Calculate the total relevant cost to make or buy the timer units. (Round answers to 0 decimal places, eg, 5,250.) Make Buy $ 1,187,500 $ Total relevant cost 1.615,000 (a2) Your answer is correct Assuming that Oriole Water has no other use for either the facilities or the equipment currently used to manufacture the timer units, should the company accept Clifton's offer? No (61) Your answer is partially correct. Assume that if Oriole Water accepts Clifton's offer, the company can use the freed-up manufacturing facilities to manufacture a new line of growing lights. The company estimates it can sell 81,670 of the new lights each year at a price of 11. Variable costs of the lights are expected to be $ 8 per unit. The timer unit supervisory and clerical staff would be transferred to this new product line. Calculate the total relevant cost to make the timer units and the net cost if they accep Clifton's offer. Total relevant cost to make $ 1.512.490 Net relevant cost if they accept Clifton's offer $ 1.369,990

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