1 MAKE OR BUY Marshall Company currently manufactures 40,000 units per year of one of its crucial parts. Direct materials are $1.50 per unit, direct labor is $0.60 per unit, and variable manufacturing overhead costs are $1 per unit. Fixed costs related the company buys the part are $50,000, and allocated fixed costs that are unavoidable are making the part that could be avoided if $45,000 per year. Marshall is considering buying 40,000 units of the part from a supplier for a quoted price of $3.80 per unit. Calculate the cost to make a part in the cost to buy the part? Should the company manufactures the part or higher than outsider