A company makes 10,000 units per year of a part for use in one of its products. Data concerning the unit production costs of the part follow. Direct materials $250 Direct labor 125 Variable manufacturing OH 50 Fixed manufacturing OH 150 Total $575 An outside supplier has offered to sell the company all of the parts it requires. If the company decided to discontinue making the parts, 20% of the above fixed manufacturing overhead costs could be avoided. Required: Assume the company has no alternative use for the facilities presently devoted to production of the parts. If the outside supplier offers to sell the parts for $425 each, should the company accept the offer? Fully support your answer with appropriate calculations.

(TCO H) A company makes 10,000 units per year of a part for use in one of its concerning the unit production costs of the Direct materials Direct labor Variable manufacturing OH Fixed manufacturing OH Total $250 125 50 150 $575 An outside supplier has offered to sell the company all of the parts it requires. If the company decided to discontinue making the parts, 20% of the above fixed manufacturing overhead costs could be avoided. Required: Assume the company has no alternative use for the facilities presently devoted to production of the parts. If the outside supplier offers to sell the parts for $425 each, should the company accept the offer? Fully support your answer with appropriate calculations