Current-Control Inc. manufactures a variety of electrical switches. The company is currently manufacturing all of its own component parts. An outside suppliers has offered to sell a switch to Current-Control for $32 per unit. To evaluate this offer, Current-Control has gathered the following information relating to its own cost of producing the switch internally:

	Per Unit	12,000 Units per Year
Direct materials	$12	$144,000
Direct labour	10	120,000
Variable manufacturing overhead	3	36,000
Fixed manufacturing overhead, traceable*	2	24,000
Fixed manufacturing overhead, common, but allocated	16	192,000
Total Cost	$49	$588,000

*Supervisory salaries, can be avoided if the switches are purchased.

Required:

Assuming that the company has no alternative use for the facilities now being used to produce the switch, should the outside supplier's offer be accepted? show all computations.