Concord Racers makes bicycles. It has always purchased its bicycle tires from the Pharoah Tires at $25 each but is currently considering making the tires in its own factory. The estimated costs per unit of making the tires are as follows:

Direct materials		$8
Direct labor		$5
Variable manufacturing overhead		$7

The companys fixed expenses would increase by $54,000 per year if managers decided to make the tire.

(a1) Calculate total relevant cost to make or buy if the company needs 9,400 tires a year.

	Make	Buy
Total relevant cost	$	$

(a2) Ignoring qualitative factors, if the company needs 9,400 tires a year, should it continue to purchase them from Balyo or begin to produce them internally?

The company ______ (should continue or should not continue) to purchase the tires.