Sanjay is the owner of SSR Pvt. Ltd. He needs item 'A' for his business. He can buy the item at Rs. 50/- per piece. Alternatively, he can produce it in-house. His accountant produces an estimate of the costs of production for the item. The basis that he advises Sanjay not to produce the item in-house as it was costlier. Comment on whether the accountant is right or not. Support with analysis.

Direct Material Cost Rs. 20 per unit

Direct Labour Rs. 10 per unit

Power cost Rs. 5 per unit

Rent of factory allocated to Item A Rs. 18 per unit

Depreciation of Plant used for manufacturing A Rs. 6 per unit.