IV. Montalvo Inc. currently manufactures the RML416 component, which produces 35,000 units of different products annually. The part is used in the production of various products manufactured by Montalvo Inc. The cost per unit for part RML416 is as follows: total cost Direct materials Direct labor Variable Costs Fixed Costs Total Costs Cost Unit $6.00 2.00 1.50 3.00 $12.50 $210,000 70,000 52,500 105,000 $437,500 of the total fixed overhead costs allocated to part RML416, S 77,000 of the direct fixed costs (production machinery lease and production line supervisor salary), none of which will be required if the manufacturing line is eliminated) . The remaining fixed costs are common costs. An outside supplier has offered to sell the piece to Montalvo for $ 11.00. There is no alternative use available for the facilities currently used to produce part R Make Buy Net Income Increase (Decrease) Direct Materials Direct Labor Variable costs Fixed Costs Purchase Price Total Costs Should Montalvo Inc. manufacture or purchase part RML416