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Make or Buy, Qualitative ConsiderationsHetrick Dentistry Services operates in a large metropolitan area. Currently, Hetrick has its own dental laboratory to produce porcelain and gold crowns. The unit costs to produce the crowns are as follows: Porcelain GoldRaw materials$ $70$ $$130$ Direct labor$2727$ Variable overhead$88$ Fixed overhead$2222$ Total$$127$ $$187$ Fixed overhead is detailed as follows:Salary $($supervisor$)$$$26,000$Depreciation$5,000$Rent $($lab facility$)32,000$Overhead is applied on the basis of direct labor hours. These rates were computed by using $5,500$ direct labor hours.A local dental laboratory has offered to supply Hetrick all the crowns it needs. Its price is $$125$ for porcelain crowns and $$150$ for gold crowns; however, the offer is conditional on supplying both types of crownsit will not supply just one type for the price indicated. If the offer is accepted, the equipment used by Hetricks laboratory would be scrapped $($it is old and has no market value$),$ and the lab facility would be closed. Hetrick uses $2,000$ porcelain crowns and $600$ gold crowns per year.Required:$1.$ Conceptual Connection: Should Hetrick continue to make its own crowns, or should they be purchased from the external supplier?What is the dollar effect of purchasing?$fill in the blank $22.$ CONCEPTUAL CONNECTION What qualitative factors should Hetrick consider in making this decision?$1.$ Quality of crowns$2.$ Reliability and promptness of producer$3.$ The price of the crowns$4.$ Reduction of workforce$5.$ Increase in workforce$6.$ Increase in fixed cost$3.$ Conceptual Connection: Suppose that the lab facility is owned rather than rented and that the $$32,000$ is depreciation rather than rent. What effect does this have on the analysis in Requirement $1?$It the cost of making the crowns to $fill in the blank $6,$ which is than the cost of buying$\mathrm{.}4.$ Conceptual Connection: Refer to the original data. Assume that the volume of crowns used is $4,200$ porcelain and $600$ gold. Should Hetrick make or buy the crowns?

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