J Plumber (Pty) Ltd J Plumber (Pty) LAd has purchased 50000 pumps annualy from Koop Ld. The price has increased each yew and reached R70.00 per unit last yeat. Because the purchase price has increased significantly, J Plumber (Pty) Ltid management has asted that an estimate be made of the cost to manufacture the pump in J Plumber (Pty) Ld faclities. J Plumber (Pty) Lod products consist of stamping and castings. The company has litive expetience with products requirg assembly. The engineering, manutacturing and accounting departments have prepared a report for management, which included the estmale shown below for an assembly nun of 5,000 pumps Additional production employees would be hired to mandacture the subassembly. No additional equipment space. supervision or administrative staff would be needed. The report states that fotal costs for 5000 unis are estimates at RS60 000 or R112 a unit. The current purchase price is R75.00 a unit, so the report recommends a continued purchase of the product "Assembly labour consists of hourly groduction workers. "Marulacturing overhead is appled 10 products on a dieect labour basis. Variable overhead costs vary dosely with direct labour cost. " "Ceneral and administrative ovechead is applied at 13.13W of the total cost of material (or components), assembly labour and manufacturing overhead. Required: 1. Was the analysis prepured by J Plumber (Pty) Ld and their departments, and their tecommendation to continue purchasing the pumps correct? Explain your answer and helude any supporting calculations you consider necessary. (8 marks) 2. Briefly discuss two qualtasive factors related to this make or buy decision. (2 marks)