Homework Question

Quirch Inc. manufactures machine parts for aircraft engines. The CEO, Chucky Valters, was considering an offer from a subcontractor that would provide 12,000 units of product P0107 for Valters for a price of $750,000. If Quirch does not purchase these parts from the subcontractor it must produce them in-house with the following unit costs: Cost per Unit Direct materials $35 Direct labor 15 Variable 10 overhead In addition to the above costs, if Quirch produces part PQ107, it would also have a retooling and design cost of $19,800. The difference between the relevant costs of producing 12,000 units of product P0107 and buying the same number of units is $ 0 $14,200 cheaper to make 0 $10,200 cheaper to make 0 the same the make and purchase 0 $1,700 cheaper to make 0 $1,000 cheaper to make