B D Foto Company makes 12,000 units per year of a part it uses in the products it manufactures. The unit product cost of this partis computed follows: 1 2 3 4 5 Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Unit product cost $12.80 20.40 2.60 10.50 $46.30 6 7 2.DU 10.50 $46,30 8 Fixed manufacturing overhead Unit product cost An outside supplier has offered to sell the company all of these parts it needs for $43.90 a unit. If the company accepts this offer the facilites now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $36,600 per year. If the part were purchased from the outside supplier $5.60 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products 12 Required: 13 Should Foto Company continue to make the product or buy it from the outside supplier? (5 marks) 14 15 Make Buy 16 Per unit Total Per unit Total 17 Number of units 8 9 0 2 Total relevant costs Decision: Reason