PreFab Corp manufactures prefabricated houses. PreFab$$s manufacturing cost per door of

the prefab houses is:

Direct Materials $ $35$

Direct Labor $50$

Variable Labor $10$

Fixed Overhead:

Depreciation $9$

Property Taxes $5$

Insurance $5$

Miscellaneous $6$

PreFab has received an offer to outsource production of the doors for a cost of $$55,000$ for $500$

doors. If Pre$-$Fab outsources manufacturing of the doors, the Miscellaneous Fixed Overhead cost

would be eliminated.

From a short$-$term perspective should PreFab make or buy the doors? Show calculations to support

your answer.