Managerial accounting

managerial accounting 5) The Crown Company must decide whether to make or buy part 128PC. Although Crown's idle equipment could be used to produce up to 10.000 units of the part, the company presently needs only 7,000 units. The estimated annual cost of making part 128PC is as follows: Allocated general manufacturing overhead $50,000 Depreciation on existing equipment 15,000 Annual additional set-up and maintenance costs 20.000 Total fixed costs $85.000 Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing cost per unit Reuter Company is willing to sell part 128PC to the Crown Company for $20 per unit. If Crown decides to purchase the part they can sell the existing equipment for $5,000 and sublet the space currently used to another company for $13,000 per year. required: a. based solely on a short-term financial analysis, determine whether Crown should make or buy the part, showing calculations in support of your decision. b. discuss three qualitative (non-financial) factors that Crown Company may consider before making the final decision