Georgian Monitors Ltd., a manufacturer of computer monitors, currently produces a 19-inch LCD monitor. The company's accounting department has reported the following annual costs of producing the LCD monitor internally: Georgian Monitors Annual Production Costs for 19-inch LCD Monitor Per Unit 9,000 Units Direct Materials $27.00 $243,000 Direct Labor $11.00 $99,000 Variable Overhead $7.00 $63,000 Production Supervisor's Salary $14.00 $126,000 Depreciation of LCD manufacturing equipment $10.00 $90,000 Allocated Fixed Overhead $6.00 $54,000 Total Cost $75.00 $675,000 An external supplier has offered to provide Georgian Monitors 9,000 units of the same LCD monitor per year at a price of $45 each Also consider the following information: The LCD manufacturing equipment has no salvage value and has no other use aside from producing the 19-inch LCD monitors. It cannot be sold. The fixed overhead costs allocated to the LCD monitors are common to all items produced in the factory. . The production supervisor will take over duties in another department if the monitors are purchased from the external supplier. If this is the case, his annual salary will drop to $113,400. Should the company continue manufacturing the monitors internally or begin purchasing them from the external supplier? AU Contact Jenson Monitors Make or Buy Analysis Production Cost Per Per Unit Differential Cost Unit Total Differential Cost (9,000 Units) Make Buy Make Buy Direct Materials $27.00 $ $ $ $ Direct Labor $11.00 $ $ $ $ $ Variable Overhead $7.00 $ $ $ $14.00 $ Supervisor's Salary $ $ $ 6 $10.00 $ Depreciation of Equipment (sunk) Allocated Fixed Overhead (common) $6.00 $ $ $ s $ $ $ $ $ Outside Purchase Price $75.00 $ Total Relevant Cost $ The company should: Check