Grand Limited currently produces a component of a product with the following per unit production costs:

Direct materials	$19
Direct labour	33
Overhead	18
Total production costs	$70

Grand Ltd. currently manufactures these components in-house, averaging production of 29227 units each year. A supplier has approached the company offering to supply 29227 units each year at a cost of $50 each.

60% of the overhead is fixed and if Grand Ltd. purchases the components, then 1/3 of the fixed overhead costs would be avoidable.

What is Grands net advantage to buying the component from the supplier?

Select one:

a. $374106

b. $233816

c. $444250

d. $268888