QUESHGN 1: MAKE DI! BUY Three Stars Inc.. manufactures prefabricated houses. The tirm's president. Michelle Brown. is interested in determining whether it would be better to manufacture the doors used in the houses or to but.r them from a supplier. The following information, based on production of 500 doors. has been gathered to help determine the best option: Cost item: Direct materials Direct labor Variable overhead Fixed overhead: Administrative salaries Pro. e taxes Insura nce Utilities Miscellaneous fixed overhea d Total costs Of the fixed overhead costs. Three Stars could save $5 per unit of miscellaneous fixed overhead it it purchases the doors from a supplier and allocates all other fixed costs elsewhere. The cost to purchase 500 doors would be $55,000. REQUIRED T. Should Three Stars make or purchase the doors? 2. 1ll'tlhat is the savings per unit? PM\" E Three Stats Inc. does not sell as many prefabricated homes in the winter as it does in the spring. summer, and fall. In the winter, builders usually are unable to construct them due to inclement and unpredictable weather. Thus, in the winter months Brown is aways faced with the option to close down her taeit'lur and lay off her employees or use her taoities for an alternative purpose. The best atternative use involves I constructing doors and selng them to retail hardware and home center stores. Last vea's nancial data for the sale of doors included this information: Revenues $250IDEI Diect casts 225,00) Faced overhead costs F NE'r IDES EM REQUIRED 1. Should Three Stars continue to manufacture the doors? Include both quantitative and qualitative reasons. ?_ IuI'Iu'hat re.s|::v-or1sibilit1.r for providing yeararound emplovment, it any. does Three Stars have to its employees