Chapman Company manufactures widgets. Embree Company has approached Chapman with a proposal to sell the company widgets at a price of $100,000 for 50,000 units. Chapman is currently making these components in its own factory. The following costs are associated with this part of the process when 50,000 units are produced:

Direct material	$44,000
Direct labor	20,000
Manufacturing overhead	60,000
Total	$124,000

The manufacturing overhead consists of $32,000 of costs that will be eliminated if the components are no longer produced by Chapman. The remaining manufacturing overhead will continue whether or not Chapman makes the components. Should the company makes its components? Please provide supporting calculations.