a) Almond Delites manufactures various types of biscuits. FMF Biscuits Ltd has approached Almond Delites with a proposal to sell the company its top-selling biscuit at a price of $22 000 for 20 000 units. The costs shown are associated with the production of 20 000 units of almond biscuits: Direct materials: $12,000 Direct labor: $5,000 Variable overhead: $8,000 Fixed overhead: $25,000 The manufacturing overhead consists of $2 000 of variable costs, with the balance being allocated to fixed costs. Assume that 40% of the fixed costs would be avoidable if the almond biscuits were purchased externally rather than produced internally.

Required:

i)Should Almond Delites make or buy the almond biscuit?

ii) What qualitative factors should Almond Delites consider before making its decision?