. Make or Buy. Roto, Inc. makes steel blades for lawn mowers that it heat treats, assembles, and sells. The cost accounting system gives the following data:

Roto has an opportunity to purchase its 100,000 blades from an outside supplier at a cost of \(\$ 2.20\) per blade. Inspection of the purchased blades will cost an additional \(\$ 5,000\) in the Quality Assurance Department. Certain leased equipment, which costs \(\$ 30,000\) and is included in fixed overhead, can be avoided if the blades are purchased. The released space could be used to make a part that is now purchased, which would save Roto \(\$ 46,000\).
\section*{Required:}
1. In quantitative terms, should Roto buy the blades from the outside supplier? Explain your decision.
2. What major factors might change the decision?

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Prime costs Variable manufacturing overhead Fixed manufacturing overhead. Units produced $ 80,000 60,000 90,000. 100,000 units.