Balder-Dash Inc. (B-DI) is a large conglomerate with both manufacturing and service-based businesses. B-DI's goal is to provide its customers (who are original equipment manufacturer or oEMs) one-stop shopping for a wide range of component parts. B-DI's customers will pay a small premium for quality but are extremely cost conscious. An opportunity to purchase an item it currently produces to sell as part of a bundle of products to one of its major customers has occurred. You have been assigned to recommend a course of action. The item in question, a small fabricated metal part, currently is sold for $5.00 and has annual demand of 10,000 units. Demand is stable and reasonably uniform throughout the year. One of B-DI's suppliers was asked to quote the part and has come back with a price o $4.00. The current standard cost for this part is $6.70. The G&A (general administrative) and R&D (research and development) costs add 20% to the standard cost for figuring profits on a per item basis. Accounting and purchasing have recommended discontinuing the part since no profit is made on the part. Marketing has proposed that the part be outsourced, which will convert an annual loss of $30,400 into a small profit. Marketing has indicated that discontinuing the part will not directly impact sales of the remainder of the bundle to the major customer but has expressed a concern that while pricing this item, the customer would "shop around" for other items in the bundle The current cost accounting picture is shown in Table 4-1