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Silven Industries has developed a new product called Chap-Off which is a lip balm that will be sold in lipstick-type tube. The product will be sold to wholesalers in boxes of 24 tubes for $8 per box. Below is the data Silven Industries has collected regarding making 100,000 boxes of Chap-Off. (Fixed MOH is allocated to products based on sales price). The costs above relate to making both the lip balm and the tube that contains it. As an alternative to making the tubes for Chap-Off, Silven has approached a supplier to discuss the possibility of buying the tubes. The purchase price of the supplier's empty tubes would be $1.35 per box of 24 tubes. If Silven Industries stops making the tubes and buys them from the outside supplier, its direct labor and variable manufacturing overhead costs per box of Chap-Off would the reduced by 10% and its direct materials costs would be reduced by 25%. Required - Part A: 1. What is the total relevant cost if Silven Industries continues to make the Chap-Off and tubes? 2. What is the total relevant cost if Silven Industries decides to purchase the tubes from the supplier? 3. Based on your calculations for Part A, should Silven make or buy the tubes? Alternative Scenario An additional consideration for Silven Industries is potential alternate uses of idle capacity if the tubes are purchased rather than made. If tubes are purchased the excess capacity could be used to develop a new product that is expected to generate an additional $40,000 of contribution margin without increasing fixed manufacturing overhead costs. Required - Part B: 4. What is the total relevant cost if Silven Industries continues to make the Chap-Off and the tubes? 5. What is the total relevant cost if Silven Industries decides to purchase the tubes from the supplier? 6. Based on your calculations for Part B, should Silven make or buy the tubes

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