txercise 13:28 Make or Buy Lar Company is currently manufacturing part Q108, producing 35.00 units annually. The part is OBJECTI in the production of several products made by Loro. The cost per unit for 9108 is as follows. Direct materials Direct labour Variable overhead Fixed overhead 5 6.00 2.00 1,50 Total $13.00 Of the total fixed overhead assigned to 0108, $77,000 is direct fixed overhead (the lease of pro- duction machinery and salary of a production line supervisor neither of which will be needed if the line is dropped). The remaining fixed overhead is common fixed overhead. An outside supplier has oflered to sell the part to Loro for S11. There is no alternative use for the facilities currently used to produce the part effect Required CEPTUAL CONNECTION Should Loro Company make or buy part Q108? tchen slices riced 2. What is the most that Loro would be willing to pay an outside supplier? 1 Ir Loro buys the part, by how much will income increase or decrease? OBJE