SHOW WORK

2 2. City Machine Inc. can make a part for an equipment at a variable cost of $15 a unit. The annual fixed cost for equipment to make it is $40,000. The company found an outside supplier who will supply the part for $10 a unit if City Machine Inc. will pay the supplier's annual fixed costs of $100,000 per year (see table). ALTERNATIVE FIXED COST VARIABLE COST Buy $100,000 per year $10 per unit Make $40,000 per year $15 per unit Refer to the instruction above to; (a) Compute the total annual cost to buy. (b) Compute the total annual cost to make. C) Should City Machine Inc. make or buy