Reno Company is a decentralized company that has two divisions, Division A and Division B. Division A has the capacity to manufacture 24,000 units of a product that could be used by Division B. Division A currently is selling 16,000 units of the product to customers outside the company, incurring the following costs: variable costs of Dh7 per unit and total fixed costs of Dh48,000. The selling price to these customers is Dh16 per unit.

Division B needs 4,000 units of the product that Division A makes. Currently, it is purchasing the units from an outside supplier at a price of Dh15 each. Division B offers to purchase the units from Division A at a price of Dh12; the managers of Division A say the price must be at least Dh14. The managers of the two divisions appear to have reached a stalemate, which threatens to prevent the transfer from occurring within the company.

Required:

c)Assume that you had to decide whether to continue making a component part or to begin buying the part from an overseas supplier, explain ONE (1) quantitative, and ONE (1) qualitative factors that would influence your decision.