The budgeted production and component unit cost for the three months commencing 01st January 2019 is as follows:- Components A B C D Budgeted production 3,000 5,000 2,500 4,500 Costs: USD USD USD USD Direct material 7400 5,400 5,000 9,000 Direct Labour 800 600 1,600 3,000 Variable overhead 500 1000 500 2,500 Fixed overhead 700 200 400 1,500 The variable overhead relates exclusively to machine utilization which costs USD 500 per hour. Two of the machines have been found to be unsafe for use and as a result only 24,000 hours of machine time will be available for the forthcoming 3 months period. However the company requires the full quantities of components budgeted and to enable this obligation to be met, The company has decided to buy in components to meet the shortfall in its own production. Quotations received for components of acceptable quality, subjected to minimum order of 100 are: A USD 9,500 B USD 7,500 C USD 17,500 D USD 6,500 propose a statement comparing the budgeted costs for the 3 month period with the list applicable to your proposal and to comment up on any matters which you consider out to receive the attention of management.