3.Part S54 is used in one of The Turtle Corporation's products. The company makes 12,000 units of this part each year. The company's Accounting Department reports the following costs of producing the part at this level of activity:

Per Unit

Direct materials

$

6.30

Direct labor

$

5.70

Variable overhead

$

4.80

Fixed Costs:

Supervisor's salary

$

7.00

Depreciation of special equipment

$

8.60

Common fixed overhead

$

7.20

An outside supplier has offered to produce this part and sell it to the company for $37.70 each. If this offer is accepted, the supervisor will be fired. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. If the outside supplier's offer were accepted, common fixed costs would be reduced by $17,000.

Now assume that the facilities that had been used to produce part S54 could be used for something else if S54 parts are purchased from an outside supplier. If this is true, would you be more likely or less likely to outsource S54 to the outside contractor?

Group of answer choices

Less likely

More likely