XYZ Company manufactures motor vehicle spare parts that need a specific piece of equipment. Purchasing from a supplier costs $7 per unit. But the company can make the same piece internally as well. The company requires 50,000 units of spare parts per annum. By producing internally, the company incurs the following costs:

Direct materials=$3/unit

Direct labor=$2/unit

Overhead costs=$1/unit

Special tools=$40,000

Questions: Should the company make or buy from outside? Show your calculation