Make-or-Buy, Traditional and ABC Analysis Brees, Inc., a manufacturer of golf carts, has just received an offer from a supplier to provide 2,600 units of a component used in its direct labor hours. The estimated traditional full cost of producing the track assembly is as follows: Prior to making a decision, the company's CEO commissioned a special study to see whether there would be any decrease in the fixed overhead costs. The results of the study revealed the following: 3 setups- $1,150 each (The setups would be avoided, and total spending could be reduced by $1,150 per setup.) yearly cost of the part-time inspectors for the track assembly operation is $12,350 and could be totally avoided if purchased. Engineering work: 450 hours, $45 /hour. (Although the work decreases by 450 hours, the engineer assigned to the track assembly line also spends time on other products, and there would be no reduction in his salary.) 75 fewer material moves at $30 per move. Required: 1. Ignore the special study, and determine whether the track assembly should be produced internally or purchased from the supplier. 2. Now, using the special study data, repeat the analysis. It is expensive to buy outside. 3. Which of the listed items is not a qualitative factor that would affect the decision? 4. After reviewing the special study, the controller made the following remark: "This study ignores the additional activity demands that inspect the incoming parts in the receiving area. Will we actually save any inspection costs?" Is the controller right