13. Motor Company manufactures 10,000 units of Part M-l each year for use in its production. The following total costs were reported last year: Direct materials $ 20,000 Direct labor 55,000 Variable manufacturing overhead 45,000 Fixed manufacturing overhead 70,000 Total manufacturing cost $190,000 Valve Company has offered to sell Motor 10,000 units of Part M-l for $16.50 per unit. If Motor accepts the offer, some of the facilities presently used to manufacture Part M-l could be rented to a third party at an annual rental of $15,000. Additionally, $4 per unit of the fixed overhead applied to Part M-l would be totally eliminated. Should Motor Company accept Valve Company's offer, and why?

A. No, because it would be $5,000 cheaper to make the part.

B. Yes, because it would be $10,000 cheaper to buy the part. (This is the answer)

C. No, because it would be $15,000 cheaper to make the part.

D. Yes, because it would be $25,000 cheaper to buy the part.

E. None of the above

Please write out the steps to this problem I dont get it.*******