Question 7: 12 Marks The Soho Company manufactures a two-in-one video system consisting of a DVD player and a digital media receiver (that streams movies and videos from internet sites such as Netflix). Soho plans to manufacture 250,000 units in 2,000 batches of 125 units each. Variable batch-level costs of $625 per batch vary with the number of batches, not the total number of units produced. Additional data: Direct materials per unit $36 Direct manufacturing labour per unit $10 Variable manufacturing OH costs per unit $6 Fixed batch-level manufacturing OH costs of materials handling and setup $750,000 $3,000,00 Fixed manufacturing OH costs - plant lease, insurance and administration O Broadfield Inc., a manufacturer of DVD players offers to sell Soho 250,000 DVD players next year for $64 per unit on Soho's preferred delivery schedule. Assume that financial factors will be the basis of this make-or-buy decision. Should Soho make or buy the DVD player.? 10 marks What if Broadfield offered a price of $59? Would your decision change? 2 marks