Restoration Hardware Corp. manufacturers household furniture, and currently makes a kitchen table thatcan be customized. Kyle, the firm's production manager, asked the finance department to compile abreakdown of costs for producing the customizable table:

Annual production costs for Customizable Kitchen Table	Per Unit
Direct Materials	$8.30
Direct Labour	$5.00
Variable Overhead	$2.65
Production Supervisor's Salary	$13.50
Manufacturing Equipment Depreciation	$2.00
Allocated Fixed Overhead	$4.00
Total Costs	$35.45

An external supplier has offered to provide Restoration Hardware 5,000 units of the same table per year at aprice of $25 each. Additional information:

• The manufacturing equipment has no salvage value and cannot be used for any other purpose. Italso cannot be sold as there is no market for the equipment.
• The fixed overhead costs allocated to the cabinets are common to all items produced in the factory.
• All current fixed costs on a per unit basis are expressed for production of 5,000 units. These costs will not change if more or less units are produced.

Requirement:

If Restoration Hardware decides to purchase the tables rather than making them, the production supervisorwill take over duties in another department with a different salary based on new responsibilities. The newsalary would be $50,000.

Should the company make or buy the tables?