1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2012. Required
2. Suppose the capacity currently used to make CMCBs will become idle if Svenson purchases CMCBs
from Minton. On the basis of financial considerations alone, should Svenson make CMCBs or buy them
from Minton? Show your calculations.
3. Now suppose that if Svenson purchases CMCBs from Minton, its best alternative use of the capacity
currently used for CMCBs is to make and sell special circuit boards (CB3s) to the Essex Corporation.
Svenson estimates the following incremental revenues and costs from CB3s: