Make-or-Buy Decisions Mikey's has been making the peanut butter that goes into its peanut butter drop cookies. A non- competing company, Taylor's, has offered to sell the needed peanut butter to Mikey's. If Mikey's makes the peanut butter, the cost to make their annual production of 40,000 cups of peanut butter (it takes 2 cups of peanut butter per batch and they annually make 20,000 batches of peanut butter cookies) is as follows: Direct Materials Direct Labor Variable OH Fixed OH Total Cost $25,600 45,800 14,700 52,000 $138,100 Taylor's offered to sell the peanut butter to Mikey's for $2 per cup. The total order would amount to 40,000 cups per year, which Mikey's management will buy instead of make if Mikey's can save at least $15,000 per year. Accepting Taylor's offer would eliminate annual fixed overhead of $5,000. Required Should Mikey's make the peanut butter or buy it from Taylor's? Prepare a schedule that shows the differential costs per cup of peanut butter. What is the maximum price that Mikey's would be willing to spend on the peanut butter