Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Giada Company produces 12,000 units of a component part used in tablet computers. An outside supplier has offered to supply the part for $1.2. The unit cost 15: Direct materials Direct labor $0.73 0.31 Variable overhead 0.09 Fixed overhead 2.50 Total unit cost 53.63 Required: 1. What are the alternatives for Giada Company? Buy the part externally 2. Assume that none of the fixed cost is avoidable, List the relevant cost(s) of internal production Direct materials, direct labor and variable overhead List the relevant cost(s) of external purchase. Purchase price 3. Which alternative is more cost effective and by how much? Making the part in house by 360 4. What if $10,040 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much? Buying the part from the external supplier by t 19,160