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 : should the company accept the offer?