In this paper, please discuss the following case study. In doing so, explain your approach to the problem, support your approach with references, and execute your approach. Provide an answer to the case studys question with a recommendation.

Assume that a firm has prepared the following cost estimates for the manufacture of a sub assembly component based on an annual production of 8,000 units.

	Per Unit	Total
Direct materials	$5	$40,000
Direct labor	$4	$32,000
Variable factory overhead applied	$4	$32,000
Fixed factory over head applied (150% of direct labor cost)	$6	$48,000
Total Cost	$19	$152,000

The supplier has offered to provide the subassembly at a price of $16 each. Two-thirds of fixed factory overhead, which represents executive salaries, rent, depreciation, and taxes, continue regardless of the decision. Should the company buy or make the product?