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Xerox Manufacturing currently produces an electronic component used in one of its printers. Xerox must produce 10,000 of these parts. The firm has been approached

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Xerox Manufacturing currently produces an electronic component used in one of its printers. Xerox must produce 10,000 of these parts. The firm has been approached by a supplier who offers to build the component to Xerox's specifications for $4.75 per unit. The full absorption cost for the 10,000 parts is computed as follows: Total Cost Unit Cost Rental of equipment $12,000 $1.20 Equipment depreciation 2,000 0.20 Direct materials 10,000 1.00 Direct labor 20,000 2.00 Variable overhead 8,000 0.80 General fixed overhead 30.000 3.00 Total $82.000 $8.20 Enough material is on hand to make 5,000 parts Required: Prepare computation to evaluate the cost make or buy for 5000 units. Which decision should be chosen

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