EXERCISE $12-3$ Make or Buy a Component $[$L$03]$

Climate$-$Control, Inc., manufactures a variety of heating and air$-$conditioning units. The company is currently manufacturing all of its own component parts. An outside supplier has offered to sell

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Chapter $12$

a thermostat to Climate$-$Control for $$20$ per unit. To evaluate this offer, Climate$-$Control, Inc., has gathered the following information relating to its own cost of producing the thermostat internally:

$\backslash$table$[[,\backslash$table$[[$Per$],[$Unit$]],\backslash$table$[[15,000$ Units$],[$per Year$]]],[$Direct materials $....................................,$$$6,$$$90,000$