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WC Sweep LLC, a Jamaican manufacturer of household brooms and mops, is considering an offer from a supplier to provide the firm with 10,000 units

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WC Sweep LLC, a Jamaican manufacturer of household brooms and mops, is considering an offer from a supplier to provide the firm with 10,000 units of a part used to manufacture its Turbo-Clean mop. The offer price per unit from the supplier is $430. The budgeted manufacturing costs for the part used to make Turbo-Clean is as follows: Additional considerations: (i) WC Sweep LLC can avoid 40% of the fixed overhead cost if it buys the part from the supplier. (ii) A new government regulation in Jamaica related to the material used to make Turbo-Clean will result in WC Sweep LLC facing additional annual inspection and testing by the Bureau of Standards, should the company continue to manufacture the part internally. This will result in an additional cost of \$200,000 each year, which is not included in the budgeted manufacturing cost presented above. (iii) If WC Sweep LLC buys the part from the supplier, the company will be able to rent the idle facilities used to manufacture the part and carn revenue of $50,000. Required: Advise the management of WC Sweep L.LC on whether they should make or buy the part. Support your answer with appropriate calculations. [TOTAL 10 MARK

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