Make or Buy, Qualitative Considerations Hetrick Dentistry Services operates in a large metropolitan area. Currently, Hetik has its own dental laboratory to produce portain and downs. The unit costs to produce the crows are w Gold Porcelain 170 $130 Direct labor 27 27 Variable overhead " Plked overhead 22 22 Total $127 5187 Fixed overhead is detailed as follows: Salary (supervisor) Depreciation Rent (lab facility) $20,000 5,000 32,000 Overhead is appled on the basis of direct labor hours. These rates were computed by using 5.500 direct labor hours A local dental laboratory has offered to supply Hetrich all the crowns it needs. Its price is $125 for porcelain crown and 150 for gold crowns; however, the offer is conditional en supplying both types of crowns will not sy one tape for the the offer is accepted, the equipment used by Hetrick's laboratory would be scrapped it is old and has no market value), and the lab facity would be client. Hetrick utes 2.000 percesinners and 600 god Required: 1. Conceptual Connection: Should Hetrick continue to make its own crowns, or should they be purchased from the external supp Make its own crowns What is the dollar effect of purchasing? Net savings 2. CONCEPTUAL CONNECTION What qualitative factors should Hetrick consider in making this decision 1. Quality of crowns 2. Relability and promptness of producer 3. The price of the crowns 4. Reduction of workforce 5. Increase in workforce 6. Increase in fixed cost Pevita