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You are a cost accountant for Dionysus Solutions, manufacturers of wine cooling appliances used in upscale restaurants. The operating profit generated by the company's two product lines, the Bacchus and the bestius models, can be ascertained by the following contribution margin income statement from the prior year: Market data suggests that there is little room to increase the sales price of the Hestus model. Furthermore, identifying opportunities to reduce the costs associated with that model's production is difficult as Dionysus recently re engineered its manufacturing processes. As such, management is considering dropping the Hestius, model. Regarding the Bacchus product, Dionysus currently manufactures a part unique to that model. The costs associated with the manufacture of that component, P.-27, is as follows: Management was recently approached by a supplier offering to manufacture and sell the P27 component to the company at a cost of $4.25 per unit. If this outsourcing contract is accepted, then Diomysus could avoid 50 percent of the fixed costs committed to the production of this part. You have been asked to consult management about dropping the Hestius model and the outsourcing agreement. Required: 1. Conduct an analysis to estimate the financial impact of discontinuing the Hestius model. Provide a brief narrative to management explaining your analysis and its results. 2. Conduct an analysis to estimate the financial impact of outsourcing the manufacture of the P27 part that is exclusive to the Bacchus model. Provide a brief narrative to management explaining your analysis and its results

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