Current Attempt in Progress

Dynatech produces whirlpool tubs. Currently the company uses internally manufactured pumps to power water jets. Dynatech has found that $40$ percent of the pumps have failed within their $12-$month warranty period, causing huge warranty costs. Because of the company's inability to manufacture high$-$quality pumps, management is considering buying pumps from a reputable manufacturer that also will bear any related warranty costs. Dynatech's unit cost of manufacturing pumps is $$82$ per unit, which includes $$19$ of allocated fixed overhead $($primarily depreciation of plant and equipment$).$ Also, the company has spent an average of $$20($labor and parts$)$ repairing each pump returned. Dynatech can purchase pumps for $$81$ per pump.

During $2020,$ Dynatech plans to sell $16,500$ whirlpools $($requiring $16,500$ pumps$).$ Determine whether the company should make or buy the pumps.

The company should $$ the pumps.

Determine the total amount of cost savings related to the better alternative.

The total amount of cost savings $ $$

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