Cost that can be incurred from local supplier $=$ number of units procured $*$ cost per unit

$=700*1450=$ $$1,015,000$

Cost that can be incurred if it is made in house:

Total cost $=$ Total fixed cost $+$ total variable cost

Total fixed cost $=$ $$40,000$

Total variables $=1,000+350=$ $$1,350$

Total variable cost $=1350*700=$ $$945,000$

Total cost $=$ $$40,000+$ $$945,000=$ $$985,000$

As the cost of in house making is less than the cost of local supplier, Hahn can go for inhouse making to save $$30,000.$