Performance management Topic 2.1: Short term decision making technique

Question2 Break Ltd can make the components required in the production sector, in-house. The components are: Com1, Com2 and Com3. Their cost information and other related data for the next period are: Com1 Com2 Com3 Production (units) 2,500 1,300 2,200 Variable cost per-unit: Direct Material - type X Direct Material - type Y Un W DO VI CA Direct Labor Variable Production Overhead Fixed overhead costs directly attributable to the making of these components are as follows - Coml is $2,500, Com2 is $3,800 and Com3 is $18,000. General fixed overhead costs are at $12,000. Components Com1, Com2 and Com3 could be bought-in from an external supplier at a contractor's price of $24, $29 and $27 per-unit, respectively. Required: Advice Break Ltd whether he should make or buy those components. Show all workings