Assume that a firm has prepared the following cost estimates for the manufacture of a sub assembly component based on an annual production of 8,000 units.

	Per Unit	Total
Direct materials	$5	$40,000
Direct labor	$4	$32,000
Variable factory overhead applied	$4	$32,000
Fixed factory over head applied (150% of direct labor cost)	$6	$48,000
Total Cost	$19	$152,000

The supplier has offered to provide the subassembly at a price of $16 each. Two-thirds of fixed factory overhead, which represents executive salaries, rent, depreciation, and taxes, continue regardless of the decision. Should the company buy or make the product?

I have gotten so far as determining the following using differential analysis:

Per unit

Per total (8,000 units)

	Make	Buy	Make	Buy
Purchase Price		$16		$128,000
Direct materials	$5		$40,000
Direct labor	$4		$32,000
Variable overhead	$4		$32,000
Fixed overhead	$2		$16,000
Total costs	$15	$16	$120,000	$128,000
Difference in favor of making	$1		$8,000

From here, how do I determine which would be the best option for the company: Leaving the facilities idle, buying the parts and renting out idle facilities, or buying the parts and using idle facilities for other products. Which would be the best decision in conjunction with the make-or-buy decision?