1. La Salle, Inc. makes 1,000 units per year of a part called a widget for use in one of its products. Per the cost accounting department, the cost to make one widget is as follows:

	Direct materials......................................................................................................	$342
	Direct labor......................................................................................................	80
	Variable manufacturing overhead......................................................................................................	48
	Fixed manufacturing overhead......................................................................................................	520
	Total manufacturing cost per unit......................................................................................................	$990

An outside supplier has offered to sell La Salle, Inc. all of the widgets it requires. All of the fixed manufacturing overhead costs will continue even if the widgets are purchased from the outside supplier.

Required:

Assume La Salle, Inc. has no alternative use for the facilities presently devoted to production of the widgets. If the outside supplier offers to sell the widgets to La Salle, Inc. for $850 each, should La Salle, Inc. accept the offer? Fully support your answer with appropriate calculations.