The Following Information Relates to Component AHB2 Manufactured by Aquarius

Essay

The following information relates to component AHB2 manufactured by Aquarius Electronics. $$\begin{array} { l l r } \text { Internal Manufacturing cost: } & \text { Direct materials } & \$ 30 \\\text { (per unit) } & \text { Direct labour } & 18 \\& \text { Variable manufacturing overhead } & 9 \\& \text { Fixed manufacturing overhead } & \underline { 17 } \\&& \underline { 74 } \\& \\\text { External acquisition price (per unit) } & & \$ 54\end{array}$$ REQUIRED:
a)Based on the financial data presented, should Aquarius continue to manufacture the part or source it from the external supplier?
b)What other factors need to be taken into account?