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A division currently manufactures 1 0 0 0 0 components per annum. The costs are as follows: A supplier has offered to supply 1 0

A division currently manufactures 10000 components per annum.
The costs are as follows:
A supplier has offered to supply 10000 components per annum at a price
of 30 per unit for a minimum of 3 years.
If the components are outsourced the direct labour will be made
redundant.
Direct materials and variable overheads are avoidable and fixed
manufacturing overhead would be reduced by 10000 per annum but
non-manufacturing costs would remain unchanged.
The capacity has no alternative uses. Required : sould the company accept the offer?
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