Response to the following problem:
Olympic Products Inc. manufactures and distributes barbecue grills. The company normally sells 1,500 of these grills each month for a price of $240 each. The material cost for a grill is $50 and the direct labor is $28. The variable overhead cost is $23 per grill, and the fixed overhead cost is $45,000 per month. A contract manufacturer has approached the company and offered to supply the grills ready to sell for $108 each. The company management believes that if it accepts this offer, Olympic Products will be able to lease unused factory space for $17,000 per month. Perform a make-versus-buy analysis.