1. Should Top Designs Ltd make or buy their Safety gear? Show all calculations for total cost method.

2. What other factors should be taken into consideration?

Top Designs Ltd currently design and manufacture a range of high quality safety gear of their own. The cost details for their latest safety gear are shown below: Direct Materials $2,200,000 Direct Labour $450,000 Variable Overhead $600,000 Fixed Overhead $750,000 Total Manufacturing Cost $4,000,000 Total Manufacturing Cost $4,000,000 Quantity Produced 8,000 units Cost Per Unit $500 An overseas manufacturer has offered to supply a similar safety gear for $425 per unit. Required 1. Should Top Designs Ltd make or buy their Safety gear? Show all calculations for total cost method. 2. What other factors should be taken into consideration? (3 + 2 = 5 marks)