32 Microline is considering buying computer cabinets from an outside vendor. Currently, Microline makes the cabinets in its own manufacturing facility. Microline can buy the cabinets for $15 each. The company uses 15,000 cabinets each year. Information about Microline's cost to manufacture the 15,000 cabinets follows:

Per Unit Total

Direct material $ 4 $ 60,000

Direct labor 6 90,000

Variable overhead 7 105,000

Fixed overhead 5 75,000

Total $22 $330,000

Fixed cost for Microline would not change if the company stopped making the cabinets.

REQUIRED:

Prepare a relevant cost schedule that indicates whether Microline should buy the cabinets or continue to make them.