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Each year, Castanets Products, Inc. manufactures and uses 20,000 units of a particular part used in producing its final product. An outside supplier has indicated

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Each year, Castanets Products, Inc. manufactures and uses 20,000 units of a particular part used in producing its final product. An outside supplier has indicated that it will produce the part for $40 per unit. Currently, Castanets is producing the part itself with the following unit manufacturing costs based upon the 20,000 units produced. If Castanets buys the part from the outside supplier, fixed manufacturing overhead will decrease by $80,000. Should Castanets Products, Inc. continue to produce the part or should it buy the part from the outside? Show calculations to support your answer. Assume that Castanets Products, Inc. could rent its facilities to another manufacturer for $50,000 if it buys the part from the outside. Would this change your answer? Explain

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