The management of Dunham Manufacturing Company needs help in deciding whether to continue manufacturing a part or buy it from outside supplier. Below is the data

P7.49B (LO 2, s) The management of Dunham Manufacturing Company has asked for your help in deciding whether to continue manufacturing a part or to buy it om an outside supplier. The part, called Tropica, is a component of Dunham's nished product. An analysis of the accounting records and the production data revealed the following information for the year ending December 31, 2020: 1. The machinery department produced 40,000 units of Tropica. 2. Each Tropica unit requires 15 minutes to produce. Three people in the machinery department work Jll-time (2,500 hours per year each) producing Tropica. Each person is paid $15 per hour. 3. The cost of materials per Tropica unit is $3. 4. Manufacturing costs directly applicable to the production of Tropica are as follows: indirect labour, $6,000; utilities, $1,500; depreciation, $2,000; property taxes and insurance, $2,000. All of the costs will be eliminated if the company purchases Tropica. 5. The lowest price for Tropica from an outside supplier is $6 per unit. Freight charges would be $0.50 per unit, and the company would require a part-time receiving clerk at $10,000 per year