Other data: 1. the balance in prepaid insurance is a one-year premium paid on june 1, 2017. 2. an inventory count on august 31 shows $478 of supplies on hand. 3. annual depreciation rates are (a) buildings (4%) (b) equipment (10%). salvage value is estimated to be 10% of cost. 4. unearned rent revenue of $4,019 was earned prior to august 31. 5. salaries of $356 were unpaid at august 31. 6. rentals of $743 were due from tenants at august 31. (use accounts receivable account.) 7. the mortgage interest rate is 8% per year.

Make or buy eastside company incurs a total cost of $120,000 in producing 10,000 units of a component needed in the assembly of its major product. the component can be purchased from an outside supplier for $11 per unit. a related cost study indicates that the total cost of the component includes fixed costs equal to 50% of the variable costs involved. a. should eastside buy the component if it cannot otherwise use the released capacity? present your answer in the form of differential analysis. use negative sign represent a net disadvantage answer; otherwise do not use negative signs with your answers. cost from outside supplier $answer variable costs avoided by purchasing answer net advantage (disadvantage) to purchase alternative $answer b. what would be your answer to requirement (a) if the released capacity could be used in a project that would generate $50,000 of contribution margin? use negative sign represent a net disadvantage answer; otherwise do not use negative signs with your answers.