LTD Furniture Ltd is an entity that produces wooden furniture to a wide variety of customers. LTD Furniture Ltd has just received an order for $1000$ wooden chairs. These chairs can either be manufactured by LTD Furniture Ltd$,$ or $40\%$ of the chairs can be purchased from an external supplier. The following information is available:

$\backslash$table$[[$Description$,$Rand value$],[$Direct material,R$200$ per chair$],[$Direct labour,R$100$ per hour$],[$Variable overheads,R$50$ per chair$],[$Manufacturing fixed cost,R$700000$ in total$]]$

It takes $3$ labour hours to produce a chair.

Should $40\%$ of the chairs be purchased externally, the labour cost will decrease by $40\%.$ The material cost will decrease by $25\%,$ while the manufacturing fixed cost will be $20\%$ lesser. Chairs will be purchased for R$700$ per chair.

Required:

Determine whether LTD Furniture

Ltd should produce all chairs, or purchase $40\%$ of the chairs

externally, by applying the relevant costing method.