Structuring a Make-er-Buy Problem Fresh Foods, a large restaurant chain, needs to determine if it would be cheaper to produce 5.000 units of its main food ingredient for use in its restaurants or to purchase the from an outside er for 512 cach. Cast information on internal production includes the following Total Cost Unit Cost $5.00 525.000 15.000 Direct materials Direct labor Variable manufacturing overhead Variable marketing overhead 3.00 7,500 1.50 11.000 red plant overhead 30,000 600 Total sh0.500 117,70 Fixed overhead will continue whether the ingredient is produced internally or externally. No additional cost of purchasing with incurred beyond the purchase price roured, round your answers to the nearest whole number Required 1. What are the alternatives for Fresh Foods? 2. Lut the relevant cout) of internal production and of external purchase 3. Which alternative is more cost effective and by how much? (Use tutal cost when giving your answer) 4. Now assume that 20% of the fixed overhead can be avoided if the ingredients purchased externally, which alternative in more cost effective and by how much? (Use total cost when giving your Structuring a Malowy Pro Freth Foods, a large restaurant channed to determinat would be cheaper to 5,000 ts of its main food ingredient for rent or to purchase them from the uppertor 512 Cost information on internal production includes fing Total Cost Unit Cost Direct materials 25,000 $5.00 Direct labor 15.000 3.00 Variable manufacturing overhead 7.500 1.50 Variable mating over 11 000 2.10 dant vers 30.000 6.00 Total $80,00 31.10 Pored veread will continue whether the ingredient is produced internally. No additional cost of purchasing beyond the purchase price required, round your wars to nearest whole number Required: Required: 1. What are the alternatives for Free Foods 2. List the relevant costs of internal production and external purchase 3. Which alternative more cost effective and by how much? (Use total cost when giving your answer 4. Now assume that 20% of the ticed overhead can be avoided at the ingredient is perche eternally. Which termave 13 are cet effective and by bow much? (use total cost wnes ghing your