1. A. Dragon Limited has received an order for 900 units of one of its products. The company can make them for a variable cost of 3.50 per unit, together with a fixed cost per batch of 225. There is a maximum batch size of 500 units. Alternatively, the product can be obtained from an outside supplier for 4.10 per unit. i. Is it cheaper to make the product or to buy it from the supplier? ii. If the company decides to put an additional 200 units into inventory, does this affect the decision at a) ? Show calculations to justify your answers. Note: a batch is a group of things dealt with at the same time B. Peter's party i) Peter decides to invite friends round to watch a DVD. Hiring the DVD costs 3.00, and he spends 2.50 per head on food and drink. There are 6 people, including Peter. Calculate the total cost and the cost per person of the evening's entertainment. ii) Peter decides to invite two more people. What additional expenditure is required? What is the impact on the costs calculated in a) ? iii) Peter would like to invite 5 more people (ie 12 guests in total), but there is not enough space for more than 7 guests at a time. Consequently he will have to arrange two film evenings. Calculate the total cost and the cost per person of the series of two film evenings. iv) What different cost types can you identify in this example