1. Make-or-Buy Decision. Vail Door manufactures doors. Management is interested in outsourcing production to a reputable company that can supply the doors for $90 per unit. Vail incurs the following: Variable production costs Direct materials Direct labor Manufacturing overhead Fixed production costs Factory lease Equipment lease Factory insurance Production supervisor's salary Total production costs Cost at Per Unit 3,000 Units $30 $ 90,000 15 20 45,000 60,000 80,000 40,000 25,000 90,000 $430,000 If production is outsourced, all variable production costs and equipment lease costs will be eliminated. The production supervisor's salary cost will remain regardless of the decision to outsource or to produce internally because the supervisor recently signed a long-term contract with the company. The factory lease has five years remaining and cannot be terminated before then. I Perform differential analysis. Assume making the product is Alternative 1, and outsourcing is Alternative 2. 1. Which alternative is best? Explain. 2. Assume Vail can lease the current space for $30,000 per year if production of doors is outsourced. The subleasing company would pay for insurance. 3. Give 2 Qualitative factors that may influence your decision