The management of ANP Ltd has asked for your assistance in deciding whether to continue manufacturing a part or to buy it from an outside supplier. The part, called PZ4, is a component of ANPs finished product. An analysis of the accounting records and the production data revealed the following information for the current year:

I. Two (2) employees are assigned to the production department and work full time (1,920 hours each per year) producing PZ4. Each employee is paid $20 per hour; II. The cost of materials per PZ4 unit is $4.00 per unit; III. Production of PZ4 also includes other miscellaneous variable cost of $1.40 per unit. All the above manufacturing costs will be eliminated if Co Ltd outsourced PZ4 from an outside supplier. IV. If PZ4 is outsourced, Co Ltd will need to hire a part-time dispatch employee at a cost of $18,000 per year; V. The lowest price for PZ4 from an outside supplier is $12 per unit; VI. Delivery costs will be $1.00 per unit; VII. The production department produced 12,000 units of PZ4. Required: Should ANP Ltd make or buy the PZ4 part? Show all calculations in a tabular format. In your answer, please provide total cost to make the item, total cost to outsource the item and indicate the benefit (in $value [i.e. how much reduction in cost of your chosen option) Please make entries in the relevant fields only below and leave the others blank. Make Buy Labour Cost Material Miscellaneous Costs Purchase price Delivery cost Part-time employee Total The company should choose the option since it is $ cheaper to make the product than to buy