Gateway manufactures 21,000 computers per year. Demand is flat so its expected production levels to remain consistent year over year. The full manufacturing costs per computer are as follows:

Direct materials	$ 500
Direct labor	100
Variable manufacturing overhead	58
Variable Selling & Administrative	2
Average fixed manufacturing overhead	26
Total	$686

Westlake College offers to buy 20,000 computers at $699 per computer. If Gateway accepts the offer, it will save 50% of its variable sales and administrative costs as a result. Gateway should:

Group of answer choices

Accept the offer; the savings is $800,000

Reject the offer, the loss is $266,000

Accept the offer, the savings is $780,000

Accept the offer, the savings is $280,000