Need help with a practice question from the last unit ## Part U67 Cost Analysis### BackgroundPart U67 is used in one of Broce Corporation's products. The company's Accounting Department provides the following costs for producing the 14,800 units required annually:- **Direct materials:** $6.80 per part- **Direct labor:** $7.10 per part- **Variable manufacturing overhead:** $1.75 per part- **Supervisor’s salary:** $5.70 per part- **Special equipment depreciation:** $4.80 per part- **Allocated general overhead:** $3.20 per part### Supplier OfferAn outside supplier has proposed to manufacture the part and sell it to Broce Corporation for $21.00 each. If accepted, the supervisor's salary and all variable costs, including direct labor, could be avoided. The equipment used for making the parts was acquired several years ago and has no salvage value or alternative use. The allocated general overhead is unavoidable, even if production ceases within the company. By accepting the supplier's offer, only $20,800 of these overhead costs can be avoided annually.### RequirementPrepare a detailed report evaluating the financial implications of purchasing part U67 from the supplier compared to continuing in-house production. Determine which option is more cost-effective for the company.### InstructionsEnter your findings in the table provided, comparing costs for making or buying:| Costs | Make | Buy ||------------------------------------|-----------|-----------|| **Direct materials** | | || **Direct labor** | | || **Variable manufacturing overhead**| | || **Supervisor’s salary** | | || **Special equipment depreciation** | | || **Allocated general overhead** | | || **Total Cost** | | |Use the analyzed data to determine the most feasible course of action for the corporation.

Direct materials: It is the basic input required to manufacture the finished products. The raw materials are processed by incurring conversion costs and other overhead to convert them into finished products. Direct labor: It is the cost of salaries and wages incurred directly to produce a product. This cost is incurred to convert the raw materials into finished product. Manufacturing overhead: It is the indirect cost incurred as a part of manufacturing the products. These costs are not directly related to the units manufactured. So they are allocated to the manufactured units based on estimated cost drivers.