ANSWER ALL QUESTIONS (100 Marks) SECTION A (25 Marks) Andrea Company manufactures a part for its production cycle. The annual costs per unit for 20,000 units of this part are as follows: Direct labor Direct materials $15 12 Variable indirect production costs 19 16 $62 Fixed indirect production costs Total cost Andrea Company has been approached by a supplier who will sell 20,000 units of the same part for $940,000. All the fixed indirect production costs are unavoidable if Andrea Company ceases production of the part. Required A) Assuming there is no alternative use for the facilities, should Andrea Company buy or make the part? B) Assume the facilities can be rented out for $100,000 per year. Should Andrea Company buy the part? If so, how much money will be saved? You should show your workings and provide a justification for the answer you provided.