An outside supplier has offered to make the part and sell it to the company for $31.00 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $3,000 of these allocated general overhead costs would be avoided. In addition, the space used to produce part Q89 could be used to make more of one of the company's other products, generating an additional segment margin of $14,500 per year for that product.

Required:

a. Prepare a report that shows the financial impact of buying part Q89 from the supplier rather than continuing to make it inside the company.

	Make	Buy
Direct materials	$61,200.000	0
Direct labor	34,000	0
Variable overhead	67,320	0
Supervisor's salary	25,840	0
Depreciation of special equipment	??????	??????
Allocated general overhead	??????	????
Outside purchase price	0	$210,800
Opportunity cost	?????	????
Total cost	????	?????