Lightning semiconductors produces 300,000 hi-tech computer chips per month. each chip uses a component that lightning makes in-house. the variable costs to make the component are $1.30 per unit, and the fixed costs are $1,200,000 per month. the company has been approached by a foreign producer who can supply the component, within acceptable quality standards, for $1.10 each. the fixed costs are unavoidable, and lightning would have no other use for the facilities currently employed in making the component. what would be the effect on operating income if the company decides to outsource?

Laval produces lamps and home lighting fixtures. its most popular product is a brushed aluminum desk lamp. this lamp is made from components shaped in the fabricating department and assembled in the assembly department. information related to the 22,000 desk lamps produced annually follows.direct materials $280,000direct labor fabricating department (8,000 dlh × $24 per dlh) $192,000assembly department (16,600 dlh × $26 per dlh) $431,600machine hours fabricating department $15,200mhassembly department $20,850mhexpected overhead cost and related data for the two production departments follow.fabricating assemblydirect labor hours 150,000dlh 295,000dlhmachine hours 161,000mh 128,000mhoverhead cost $400,000 430,000required1. determine the plantwide overhead rate for laval using direct labor hours as a base.2. determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate.3. compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the assembly department.4. use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps.