Outsourcing decision affected by opportunity costs Taylor Doors Company currently produces the doorknobs for the doors it makes and sells. The monthly cost of producing 2,000 doorknobs is as follows:

Spivey Company has offered to sell comparable doorknobs to Taylor for $5 each.
Required

a. Should Taylor continue to make the doorknobs? Support you answer with appropriate computations.

b. For $5,000 per month, Taylor could lease the manufacturing space to another company. Would this potential cash inflow affect your response to Requirement a? Explain.