1) assess whether elite products ltd should continue to produce the part for product x internally or whether it should purchase it from outside suppliers. Provide all workings2) if only one of the four joint products can be processed further, advise the management which product should be processed further. Explain with calculation.3) if common costs up to the split- off point were allocated on the basis of the market value, would your decision i part (2) be different? Briefly explain why or why not?

Elite Products Lid is evaluating its make-versus-buy decisions for several of its products. In respect of Product X, the manufacturing costs per part are as follows: Direct materials $ 8.50 Direct labour (all variable cost) 4.00 Variable manufacturing overhead 2.00 Fixed, traceable, manufacturing overhead 3.00 Fixed, allocated common manufacturing overhead 1.50 Unit product cost $ 19.00 The current level of production of this part is 2,000 units. Of the traceable manufacturing overhead, 40% consists of amortization of special equipment that has no salvage value and 60% consists of salaries that could be avoided if the production of the part is discontinued. For this part, an outside supplier will sell parts to the company at a price of $17 per unit if the company purchases 2,000 units. Elite also produces another four joint products using the same production process. Each product can also be processed further. The common costs of these four products, up to the split-off point, are $350,000, and these costs are allocated based on the quantity produced. Information regarding production, prices, and costs for each product are provided below: Joint Number of Units Selling Price at Selling Price after Extra Costs for Products Produced Split-off Point Further Processing Further Processing A 400,000 $2.93 $3.90 $350,000 B 300,000 2.79 4.97 300,000 C 150,000 4.65 5.59 200,000 D 80,000 1.89 3.55 100,000