PTB Cabinets is a company located in Abbotsford, BC that makes kitchen and bathroom cabinets for higher end homes. They fully manufacture all aspects of their product, from wood purchased from local sawmills.

The company has received and offer from Old World Cabinets to make the hinges for their cabinets. Currently PTB has a total cost of $20,000 on hinge manufacturing (40,000 units). $5,000 of that is allocated as part of the building space the department occupies. $2,000 is a variable fixed cost related to supervision of staff, janitorial, and utilities. $13,000 is direct labour and materials. Old World Cabinetshas offered to supply the hinges for $14,000

Prepare a Memo to PTB Cabinets, your clients. In your memo identify and evaluate issues, both quantitative and qualitative, based on the facts above, and give them a recommendation. You can also suggest some options that may change the decision and your recommendation. Use as many terms from the course as are applicable.