Structuring a Make-or-Buy Problem Coed Scents, a national producer of young adult perfumes and colognes, needs to determine if it would be cheaper to produce 100,000 bottles of its most popular perfume, Two AM, for sale in its college town shops or to purchase them from an outside supplier for $25 each. Cost information on internal production includes the following: Direct materials Direct labor Variable manufacturing overhead Variable marketing overhead Fixed plant overhead Total Cost $2,000,000 350,000 150,000 250,000 300,000 $3,050,000 Unit Cost s 20.00 3.50 1.50 2.50 3.00 $30.50 Total Fixed overhead will continue whether Two AM is produced internally or externally. No additional costs of purchasing will be incurred beyond the purchase price. Required: 1. What are the alternatives for Coed Scents? 1. What are the alternatives for Coed Scents? Make Two AM in-house or buy it externally. Buy Two AM in-house materials and then sell it externally. Buy Two AM externally and incur variable marketing costs. external purchase. By how much? 4. Now assume that Coed Scents' internal audit team learned through a special data analytics project that intellectu a significant threat for outsourced production. The team estimates that if Coed Scents outsources its production, it w $350,000 to manage intellectual property theft of its Two AM brand by competitors operating in the country where the Required 1. What are the alternatives for Coed Scents? 2. List the relevant cost(s) of internal production and of external purchase. Make-direct material, direct labor and variable overhead; Buy- purchase price Make- sales price, direct material and fixed cost, Buy-purchase pric Make- sales and fixed cost, Buy- fixed cost and purchase price None of the above at coea Scents internar aualt team learned tnrough a special data analytics project that intel ificant threat for outsourced production. The team estimates that if Coed Scents outsources its production $350,000 to manage intellectual property theft of its Two AM brand by competitors operating in the country whe 4. Now assume tn 1. What are the alternatives for Coed Scents? 2. List the relevant cost(s) of internal production and of external purchase. 3. Which alternative is more cost effective? Buy Two AM externally Make Two AM in-house 4. Now assume that Coed Scents' internal audit team learned through a special data analytics project that a significant threat for outsourced production. The team estimates that if Coed Scents outsources its produ $350,000 to manage intellectual property theft of its Two AM brand by competitors operating in the country List the relevant cost(s) of internal production and of external purchase 3. Which alternative is more cost effective? By how much? 4. Now assume that Coed Scents' internal audit team learned through a special data analytics project that intellectual p a significant threat for outsourced production. The team estimates that if Coed Scents outsources its production, it will m $350,000 to manage intellectual property theft of its Two AM brand by competitors operating in the country where the o production occurs. Which alternative is more cost effective? By how much