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1. Make or Buy decisions Xerox Manufacturing currently produces an electronic component used in one of its printers. Xerox must produce 10,000 of these parts.

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1. Make or Buy decisions Xerox Manufacturing currently produces an electronic component used in one of its printers. Xerox must produce 10,000 of these parts. The firm has been approached by a supplier who offers to build the component to Xerox's specifications for $4.75 per unit. The full absorption cost for the 10,000 parts is computed as follows: Rental of equipment Equipment depreciation Direct materials Direct labor Variable overhead General fixed overhead Total Total Cost Unit Cost $12,000 $1.20 2.000 0.20 10,000 1.00 20,000 2.00 8.000 0.80 30.000 3.00 $82,000 $8.20 Enough material is on hand to make 5,000 parts Required: Prepare computation to evaluate the cost make or buy for 5000 units. Which decision should be chosen

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