Casio Company manufactures 100,000 units of microprocessor each year for use in its production. The following total costs were reported last year: DM $195,000 DL $170,000 VMO $115,000 FMO $300,000 Total Manufacturing Costs $780,000 TI Company has offered to sell Casio 100,000 microprocessors for $7.50 per unit. If Casio accepts the offer, only 2$ of the fixed overhead applied to a microprocessor (one unit) will be eliminated and some of the facilities presently used to manufacture the microprocessor could be used to produce a new product that is estimated to generate a contribution margin of $185,000 , while increase fixed costs by $95,000 . Should Casio accept TIs offer, and why?

Please explain and show work.