26. Please answer the following

Speedy Bikes currently manufactures the bike saddles it uses for the bicycles it builds at its Halifax production facilities. Speedy has been approached by Pokey Inc, a company in Prince Edward Island, who has indicated they can make the identical saddles for Speedy at a cost of $10 each. The accounting department at Speedy has been asked to summarize the costs of manufacturing the saddles over the past fiscal year. This is what they provided: Costs Direct materials $21,000 Direct labour $15,000 Variable overhead $10,000 Equipment depreciation $14,000 Allocated fixed overhead $20,000 Total costs $80,000 Total saddles produced 5,000 The accountants believe that 10% of the fixed overhead costs could be saved if the saddle was not manufactured at the Halifax facility. The equipment used to manufacture the saddles is a specialized piece of equipment and cannot be used to make any other parts. Also, it is believed the equipment has no value to anyone. Required: Should Speedy accept Pokey's offer? Support your answer with an analysis of the costs. Show your calculations