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DSP Manufacturing produces a small refrigerator that requires a motor. It has the opportunity to purchase these Motors from a reliable supplier at a purchase

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DSP Manufacturing produces a small refrigerator that requires a motor. It has the opportunity to purchase these Motors from a reliable supplier at a purchase price of $22 per motor. Currently, DSP manufactures the motors. DSP's costs for it production of 5,000 motors are as follows: Variable Costs per Motor: Direct Materials $2.00 Direct Labor $8.00 Variable Overhead $6.00 Fixed Costs per $50,000 Period Costs per Motor: Direct Materials $2.00 Direct $8.00 Labor Variable Overhead $6.00 Fixed Costs per $50,000 Period If DSP purchases the motors, 40% of the fixed costs can be eliminated. DSP should (type make or buy) the motors, because the net income would increase by (type in the dollar amount of change)

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