Aires Company has always purchased part A27 from an outside supplier for $8.40 per unit; however, due to a recent reduction in output, the company has excess capacity that could be used to produce the part in-house. Aires currently purchases 40,000 units of part A27 and could make this same number of units in-house. Cost details for making A27 in-house are shown below: $3.10 2.7 Direct materials Direct labor SuperviSion Depreciation Variable Manufacturing Overhead Rent Total Cost 0.6 0.3 $9.20 The supervisor cost in the schedule above would have to be hired to oversee production of the starters. However, the company has sufficient idle tools and machinery so that no new equipment would have to be purchased. The rent charge above is a cost allocated to all products based on space utilized in the plant. The total rent on the plant is $80,000 per period. Depreciation is due to obsolescence rather than wear and tear Required Req a Determine the relevant cost per unit if Starters are made inside the company Req b Which option is better for Aires, taking production in-house or continuing to outsource? What is the total benefit of this option as compared to the other option