QUESTION 2 PARTI Company Y is evaluating whether it should continue manufacturing a component or buy it from an outside supplier. This component costs $70 to manufacture. The total cost of production is given in the table below Direct material $24,000 Direct Labour $18,000 Direct Labour hours 900 Manufacturing overhead Variable $20,000 Fixed manufacturing overhead $30,000 Units completed 5000 The company uses 5000 components per year. A supplier company X offered to provide this component for $65.00 per component, some managers felt they could reduce the cost by buying from the outside supplier If company buys the component it will avoid $8.00 per unit and $2.00 on VOH. The company can rent the unused portion of the factory for $15,000. REQUIRED Should the company make or buy the component