Southwestern Company needs 1,000 motors in its manufacture of automobiles. It can buy the motors from Jinx Motors for ${BUY} each. Southwestern's plant can manufacture the motors for the following costs per unit:

Direct materials ${DM}

Direct manufacturing labor 281

Variable manufacturing overhead 245

Fixed manufacturing overhead 355

Southwestern buys the motors from Jinx, 70% of the fixed manufacturing overhead applied will not be avoided .calculate the dollar amount Jabari would save or loss i they make the motors.

Required:

a. Should the company make or buy the motors?

b. What additional factors should Southwestern consider in deciding whether or NOT to make or buy the motors?