Fairhaven Company Needs 1,000 Motors in Its Manufacture of Boats

Essay

Fairhaven Company needs 1,000 motors in its manufacture of boats.It can buy the motors from Asian Motors for $1,250 each.Southwestern's plant can manufacture the motors for the following costs per unit:

If Southwestern buys the motors from Jinx,70% of the fixed manufacturing overhead applied will not be avoided.
Required:
a.Should the company make or buy the motors?
b.What additional factors should Southwestern consider in deciding whether or NOT to make or buy the motors?