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ProPrinters Uses Part 87A in the Production of Colour Printers

question 71

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ProPrinters uses part 87A in the production of colour printers. Unit manufacturing costs of part 87A are as follows:
ProPrinters uses 100,000 units of 87A per year. Printers R Us has offered to sell ProPrinters 100,000 units of 87A per year for $12. Fixed overhead is unavoidable.  Direct materials $8 Direct labour 2 Variable overhead 1 Fixed overhead 4\begin{array}{lr}\text { Direct materials } & \$ 8 \\\text { Direct labour } & 2 \\\text { Variable overhead } & 1 \\\text { Fixed overhead } & 4\end{array}
-Refer to the Figure.Should ProPrinters make or buy the part,and what would be the financial consequence?

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