P - 12.A company is now producing small subassemblies that are usedin the production of one of the company's main product lines. The company'saccounting department reports the following cost of producing thesubassembly internally.Perunit8,000unitsDirect materialsRs.3Rs.24,000Direct labour432,000Variable overhead18,000Supervisor's salary324,000Depreciation of specialequipment216,000Allocatedgeneraloverhead540,000Rs.18Rs.144,000The company has just received an offer from an outside supplier who willprovide 8,000 subassemblies a year at a firm price of Rs.15 each.Required:i.Should the company stop producing the subassemblies internally andstart purchasing from the outside supplier?ii.Would the decision made in (i) above change in case the space being usedto produce subassemblies would generate a segment margin ofRs.50,000.(TU 2058)The Mettle Industry Ltd. has been purchasing a component called 'X' fromthe supplier at a cost of Rs. 10 per units. The selling price and the details of