XYZ Company needs 1,000 motors in its manufacture of automobiles. It can buy the motors from ABC for $1,250 each. XYZ's plant can manufacture the motors for the following costs per unit:

Direct materials $ 650

Direct manufacturing labor 250

Variable manufacturing overhead 200

Fixed manufacturing overhead 350

Total $1,450

If XYZ buys the motors from ABC, 75% of the fixed manufacturing overhead applied will not be avoided.

Required:

Should the company make or buy the motors? Show calculations.