Decision

A company wants to decide whether to make its materials in-house or to sub-contract production to an external supplier. In the past it has made four materials in-house, but demand in the next year will exceed in- house production capacity of 8,000 units. All four materials are made on the same machines and require the same machine time per unit: machine time is the limiting production factor. The following information is available. Material W X Y Z Units required 4,000 2,000 3,000 4,000 Variable cost of in-house manufacture $8 per unit $12 per unit $9 per unit $10 per unit Directly attributable fixed cost expenditure $5,000 $8,000 $6,000 $7,000 Cost of external purchase $9 per unit $18 per unit $12 per unit $12 per unit Directly attributable fixed costs are fixed cash expenditures that would be saved if production of the material in-house is stopped entirely. If a decision is made solely on the basis of short-term cost considerations, what materials should the company purchase externally? Select... ? A.4,000 units of W and 1,000 units of Z B. 4,000 units of W and 4,000 units of Z C.3,000 units of Y and 2,000 units of Z D. 1,000 units of Y and 4,000 units of Z My question - Answer is B . I understand that the difference for additional units for W is -1000 and for Z is +1000 , X is +4000 and Y is +3000 then we definitely need to purchase W from externally but why Z and how did they get 4,000 units for W and Z each. Can you please help me with that .. Thanks in advance ..