ISKO Company currently produces a part that is being used by some of its products. The company has calculated the following costs for making the part:

Unit costs:

Materials....................................$23

Labor.........................................32

Overhead...........................,........3

Allocated facility level costs........10

Total Unit Cost...........................$68

A supplier offered ISKO company a similar part for $72 each. ISKO needs 10,000 units each year. If ISKO does outsource, it can use the facilities to make another product that will give a contribution margin of $50,000 per year.