Blue birds Products manufactures 20,000 units of part A-1 annually for use in its production. The following costs are reported

: Direct materials $ 40,000

Direct labour. 110,000

Variable factory overhead... 90,000

Fixed factory overhead 140,000

$380,000

Lufkin Company has offered to sell blue birds 20,000 units of Part A-1 annually for $17 per unit. If blue birds accepts this offer, some of the facilities presently use to manufacture Part A-1 could be rented to a third party at an annual rental of $30,000. Additionally, $4 per unit of the fixed factory overhead applied to Part A-1 would be totally eliminated.

Required: Should blue birds accept Lufkins offer?