A manufacturer has been purchasing some components for $350 a piece as an input to its manufacturing process. The factory currently operates at 80% of capacity. The company has skilled labour and a training budget to update skills of workers. The company operates in a city where skilled labour is tough to find. The cost per unit to make these components at the factory is estimated as follows: Direct materials Direct labour Variable factory overhead Depreciation on factory equipment Other fixed factory overhead Total estimated cost per unit Purchases have been Total budget estimate $ 100 175 50 25 50 $ 400 10,000 units $4,000,000 Questions: 1. Use quantitative analysis to assess whether the company should change from purchasing the components. (7 marks)