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Structuring a Make-or-Buy Problem Fresh-Foods, a large restaurant chain, needs to determine if it would be cheaper to produce 5,000 units of its main food ingredient for use in its restaurants or to purchas them from an outside supplier for $12 each. Cost information on internal production includes the following: required, round your answe whether the ingredient is produced internally or externally. No additional costs of purchasing will be incurfed beyond the purchase price. If Required: 1. What are the altematives for Fresh Foods? Make the ingredient in house or buy it externally. 2. List the relevant cost(s) of internal production and of external purchase. 3. Which aiternative is more cost effective and by how much? (Use total cost when giving your answec) 4. Now assume that 20% of the fixed overhead can be avoided if the ingredient is purchosed externally, Which altemative is more cost effective and by how much? (U) total cost when giving your answer.) 30 Structuring a Make-or-Buy Problem Fresh Foods, a large restaurant chain, needs to determine if it would be cheaper to produce 5,0 them from an outside supplier for $12 each. Cost information on internal production includes th: reouired. round vour answers to the nearest whole number. reouired, round vour answers to the nearest whole number. Buy the ingredient externally and sell it in house. Make the ingredient in house and sell it externally. Make the ingredient in house or buy it externally. 2. List the relevant cost(s) of internal production and of external purchase. 3. Which alternative is more cost effective and by how much? (Use total cost when giving your answe ; 4. Now assume that 20% of the fixed overhead can be avoided if the ingredient is purchased externall? total cost when giving your answer.) Fresh Foods, a large restaurant chain, needs to determine if it would be che them from an outside supplier for $12 each. Cost information on internal pri rixed overnead will continue whether the ingredient is produced internally or ex required, round your answers to the nearest whole number. ar purchase. 3. Which alternative is more cost effective and by how much? (Use total cost whe 4. Now assume that 20% of the fixed overhead can be avoided if the ingredient is total cost when giving your answer.)