Baxter Corp currently makes 10,000 subcomponents annually. The unit production costs are as follows:

	Per Unit
Direct materials	$25
Direct labor	$10
Variable overhead	$15
Fixed overhead	$20

An outside supplier offers to provide Baxter Corp with the 10,000 subcomponents at a $65 per unit price.

(T or F) If Baxter Corp accepts the outside offer, then short-term profits will increase by $150,000.

True

or False