CASE ASSIGNMENT 2 (7pal'm's) Cat Company makes 12,000 units per year of a part that it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct Materials $1 1.70 Direct Labour $15.30 Variable Manufacturing Overhead $4.30 Fixed Manufacturing Overhead $23.90 Unit Product Cost $55.70 An outside supplier has offered to sell the company all the parts that Cat needs for $57.20 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional segment margin on this other product would be $100,000 per year. If the part were purchased from the outside supplier, $20.70 of the xed manufacturing overhead cost being applied to the part would continue. QUESTION 1 Should Cat Company make the product or purchase it from the outside supplier? (Show all calculations} (6 points) QUESTION 2 What is the decision rule for this type of scenario? {I point)