ABC corporation produces customized items for the car industry. The company is thinking about outsourcing the production of a particular item to a specialized supplier. The company management has developed the following cost figures based on an annual volume of 50,000. Current Company Operations (insourcing) Supplier (outsourcing) Overhead, $400,000 Labor, $10.50 per unit Materials, $5.00 per unit Administration, $200,000 Purchase price, $20 per unit Administration costs, $50,000 Inspection costs, $80,000 Transportation costs, $2 per unit 1) Calculate the total cost of each option. Which is cheaper, insourcing or outsourcing with the supplier? 2) How would the results change if the annual volume decreases to 10,000 units