Procter & Gamble evaluates whether to make or buy a component for its product line. In September 2041, the following data is provided:

• In-House Production Cost: $12 per unit
• Outsourcing Cost: $10 per unit
• Annual Demand: 500,000 units

Requirements:

• Perform relevant cost analysis for the make-or-buy decision.
• Calculate the total cost savings from outsourcing.
• Prepare a recommendation report.
• Discuss non-financial factors affecting the decision.