Question 2-Make vs Buy (20 mark completed your audit of the Surtel Company, management asked for your When you completed your audit of the Surtel Com in deciding whether to continue manufacturing a part or to part, which is company. From your buy it from an outside component used in of the audit working papers and from further investigation, you develop the the company's operation for Faktrons is 5,000 units. The lowest quotation from a supplier was The annual requirement S8 per unit . anufactured in the precision machinery department. If Faktrons are urchased from an outside supplier, certain machinery will be sold and would realize its net book value. t costs apply to the manufacture of Faktrons: power, $300, other .The following precision machinery direct materials, S17,500; direct labour, $28,000; indirect labour $500. The sale of the equipment used for Faktron amounts indicated: depreciation, $2,000; property taxes and insurance, $1,000. The following additional precision machinery department costs would be incurred if F were purchased from an outside supplier, frei receiving, materials handling, and inspection $5,000. The cost of the purchased Faktrons would be considered a precision machinery department cost. s would reduce the following costs by the aktrons . Required a. Prepare a schedule comparing the total costs of the precision machinery department (1) when Faktrons are made, and (2) when Faktrons are bought from an outsider supplier. (15 marks) Discuss the QUANTITATIVE & QUALITATIVE considerations you would bring to the attention of managers in assisting them in deciding whether to make or buy Faktrons. Include in your discussion considerations that might be applied to the evaluation of the outside supplier. (5 marks) b