Every year Riverbed Industries manufactures 7,300 units of part 231 for use in its production cycle. The per unit costs of part as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total $5.00 11.00 6.00 10.00 $32.00 Ivanhoe, Inc., has offered to sell 7,300 units of part 231 to Riverbed for $34 per unit. If Riverbed accepts Ivanhoe's offer, its freed-up facilities could be used to earn $10,500 in contribution margin by manufacturing part 240. In addition, Riverbed would eliminate 40% of the fixed overhead applied to part 231.