IBM1003C (Fall Session) - Procurement In Class Activity - Make or Buy Decision (Simulation) Question 1 Microsoft Inc. is deciding between manufacturing a macro robo-chip in-house that costs $186 per unit, including direct cost, fixed overheads, and variable overheads, as given in the table below. Direct Cost 165 Fixed Overhead 14 Variable Overhead 7 Total Cost 186 Apple also makes the same macro robo-chip which is available in the market at $173 per unit, including the cost of buying, shipping, and warehousing, as shown in the table below. Cost of robo-chip 170 Shipping and Warehousing Cost 3 Total Cost 173 If surplus capacity available will remain idle if the component is bought, should Microsoft Inc. make or buy the macro robo-chip? (B) Will your answer be different if Microsoft Inc. can utilize the capacity in making some other part which contributes to say $4 per unit in profits