PT Fantastic is a company engaged in the manufacture of accessories such as necklaces and bracelets. PT Fantastic needs 300,000 motes to meet customer demand every year. PT Fantastic usually produces these motes themselves with the breakdown of costs for each batch as follows: DM Rp49,000 DL Rp25,000 VOH Rp7,000 FOH Rp1,200,000. 1 Batch = 500 motes. The normal capacity is 1000 batches. Recently, an outside supplier offered a mote of the same quality at a price of Rp8,150 per pack. Each pack contains 50 mote grains. If the company buys mote from an outside supplier, then there is a direct labor wage that can be reduced by IDR 7,000,000.

Required:

a.Should PT Fantastic buy mote from an outside supplier or continue to produce its own? Make the calculations and give your explanation!

b.If it is assumed that the company can avoid one third of its fixed overhead costs if it buys motes from outside suppliers, should PT Fantastic now buy motes from outside suppliers or continue to produce their own? Give your calculation and explanation!