Harris Company uses 5,000 units of part AA1 each year. The cost of manufacturing one unit of part AA1 at this volume is as follows:

Direct materials	$10.00
Direct labour	14.00
Variable overhead	6.00
Fixed overhead	__4.00
Total	$34.00

An outside supplier has offered to sell Harris Company unlimited quantities of part AA1 at a unit cost of $31.00. If Harris Company accepts this offer, it can eliminate 50 percent of the fixed costs assigned to part AA1

Required:

Indicate whether Harris Company should make or buy the commodity and why. Provide analysis to support your decision.