2 Limbbfgabemanufacturingstanisconsiderhether to naked autsourceits ownseat cushions neededfor its chairs. lheexpected pricetheushighspennit If it car ting etprod gethecompanywoulding theflowingunit, cost: Direct, materialdirecabeits ariaoverhbark ed erheaded theveragedurequirement00132toatotoP5.3 Let us assumethat naterials and labor costs areexpected to increase by20% retpaid Factorverheasksihemaneamexcepttoof the fixed,overhead wil beaimrated in case the company deades,to lay the seat a shans fromdinar supples Moreover,.thefaultties presa bly bang used Inthenarufactureat seat cushions canbeutilizedto nanufadureardiher part the nan product in case such faqlies becone vacant wenthecompany deades to stop prod ting theset a short, Thealternativeused resources Wouldresult into cost savings of PICOCCO Assumefurther that the company's requirement for seat cushions is expected to increase by 4,C00 units next period MAKE Dred Mtaid 13X 14000 X20 182 880 .400 Direct Labor 15x 14000 10 090 X20 252 VariaddeOahead 5x1400 600 TOTAL VARIABLEMANUFACTURINGCOST 1400 HUN FadayQahead 20X 14000 ess : cost savings 188:888 TOTALCOST P720,400 BUY PurchaseRice Xra d'units 24.000 TOTAL FixedOverhead 12x14,000 ,000 689 TOILCOST P868,000