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Make-or-Buy, Traditional Analysis Garcia Company produces two different types of gauges: a density gauge and a thickness gauge. The segmented income statement for a typical quarter follows. * Includes depreciation. Direct materials $2 No significant non-unit-level costs are incurred. Garcia is considering two altematives to supply the productive capacity for the subassembly. 1. Lease the needed space and equipment at a cost of $29,160 per quarter for the space and $10,800 per quarter for a supervisor. There are no other fixed expenses. $41,040,$8,640 of which is depreciation on equipment. If the thickness gauge is dropped, sales of the density gauge will not be affected. Required: 1. Should Garcia Company make or buy the subassembly? If it makes the subassembly, which alternative should be chosen? Enter the relevant costs of each alternative. 2. Suppose that dropping the thickness gauge will decrease sales of the density gauge by 10 percent. What decision should naw be made? what is the correct decision