Make or Buy Decision

Problem XYZ Company can produce a product for $40 per unit. The investment per unit in equipment is $20, in labor is $10, in raw material is $8, and in fixed overhead is $2. XYZ can purchase the product from ABC Industries for $35. When we buy the product, we still have a $15 cost of equipment. Should XYZ outsource the production of the product and buy it? (Show your analysis by working out the problem.)