CASE ASSIGNMENT 2 (7 points) Cat Company makes 10,000 units per year of a part that it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct Materials $13.10 Direct Labour $23.80 Variable Manufacturing Overhead $3.70 Fixed Manufacturing Overhead $22.50 Unit Product Cost $63.10 An outside supplier has offered to sell the company all the parts that Cat needs for $55 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional segment margin on this other product would be $164,000 per year. If the part were purchased from the outside supplier, $18.90 of the fixed manufacturing overhead cost being applied to the part would continue. QUESTION 1 Should Cat Company make the product or purchase it from the outside supplier