Tooton company produces Component A, B, and C. All of the three components require two departments, the Forming Department and the Finishing Department. Tooton company produces 20,000 Component A per year. The details of per-unit Component A in the two departments are below: Forming Department Finishing Department Prime costs/unit 8 direct materials costs 10 direct labour costs Manufacturing times (hours per unit) 4 machine hours 3 direct labour hours The overhead costs for these two Departments are also provided in the table below: Forming Department Finishing Department Variable overheads () 200,000 400,000 Fixed overheads () 400,000 250,000 Total overheads () 600,000 650,000 Allocation base Machine hours 50,000 hours Direct Labour hours 100,000 hours The purchase price from the supplier is 30. Whether Tooton company should purchase Component A from the supplier? Question 15 Answer a. Yes b. No