Every year, Kansas Company manufactures 5,000 units of part 231 for use in its production cycle. The per unit costs of part 231 are as follows:

Direct materials	$ 5 per unit
Direct labor	$ 12 per unit
Variable overhead	$ 8 per unit
Fixed overhead	$ 10 per unit

Verona Company has offered to sell 5,000 units of part 231 to Kansas for $32 per unit. If Kansas accepts Veronas offer, its freed-up facilities could be used to earn an additional $10,000 (with no impact on fixed costs), by manufacturing part 240. In addition, Kansas would eliminate 40% of the fixed costs applied to part 231.

Explain, showing all computations, whether Kansas should accept or reject the offer.