8) Given the following data, determine the total annual cost of making with each of process A and B and of buying. Estimated demand is 10,000 units a year. Which alternative is best? LO2

	Make
	Process A	Process B	Buy
Variable cost per unit	$50	$52	$51
Annual fixed cost	$40,000	$36,000
Transportation cost per unit			$2

For Problem 8, suppose that the operations manager has said that it would be possible to achieve a 10 percent reduction in the fixed cost of process B and a 10 percent reduction in Bs variable cost per unit. Would that be enough to change your answer if the estimated annual cost to achieve those savings was $8,000? Explain.