National Motors manufactures cars and currently uses only 50% of its manufacturing facility (20,000 cars). The company could utilize more of its facility by producing its own tires. It currently purchases tires at $30 per set of four. National would incur $12 per set for direct materials, $10 for direct labour, and $24 for overhead (which is 30% variable)if it produces the tires.
a)Should National Motors make or buy the tires? Provide calculations that support your answer.
b)Suppose National Motors could rent the unused portion of its plant and receive $1,500 a month. Should the company make or buy the tires? Provide calculations that support your answer
c)List two qualitative factors that could affect this decision.

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The Answer of National Motors manufactures cars and currently uses only 50% of its manufacturing facility (20,000 cars). The company could utilize more of its facility by producing its own tires. It currently purchases tires at $30 per set of four. National would incur $12 per set for direct materials, $10 for direct labour, and $24 for overhead (which is 30% variable)if it produces the tires.
a)Should National Motors make or buy the tires? Provide calculations that support your answer.
b)Suppose National Motors could rent the unused portion of its plant and receive $1,500 a month. Should the company make or buy the tires? Provide calculations that support your answer
c)List two qualitative factors that could affect this decision.

National Motors Manufactures Cars and Currently Uses Only 50% of Its