Freezone Ltd makes 30,000 units per year of part FZ320 used in the range of electrical goods it manufactures. The unit costs of this part are as follows; 24.70 16.30 2.30 13.40 Total 56.70 Direct Materials Direct Labour Variable manufacturing overhead Fixed manufacturing overhead An outside supplier has offered to supply Freezone Ltd with as many of these parts as it needs, for 44.50 each. If the part were purchased from the outside supplier, all direct labour costs associated with the product could be avoided, but in the short term, all fixed overhead costs would have to be reapportioned over the remaining product range. a)Calculate the relevant cost per unit of part FZ320 in relation to the decision of whether to make or buy in the part. 6 marks b) If Meridian accept the offer to purchase the part from the outside supplier, the production facilities now being used to make the part could be used to make 4,000 more units of its best selling product, each of which generate a contribution of 11. Taking into account this additional information, what is the total additional cost or saving of purchasing 30,000 units per year of FZ320 rather than making it? 10 marks