$1.$ The Key Company produces K$-104$ a type of computer microprocessor. The cost per unit based on a volume of $10,000$ units produced monthly is:

Direct Materials $ $3$

Direct Labor $15$

Indirect Costs

Variables $6$

Fixed $8$

Cost per unit $$32$

Clave has an offer in which they sell him the inventory of the $10,000$ units he needs for the next month for $$30/$u$.$ If you accept the offer, the physical plant will have idle space that can be used to process other products and will save you $$45,000$ in costs. Additionally, fixed overhead costs per unit will be reduced by $$5.$

Required

$1-$ Identify $($separately$)$ the relevant costs and those that are not relevant when evaluated in light of this alternative that Key has. Why are they or are they not relevant? Explain.

$2-$ Which alternative is better for the company: buying or producing? Demonstrate. Additionally, discuss at least one qualitative factor that should be taken into account in the decision.