Jeff Company produces a part that is used in the manufacture of one of its products. The annual costs associated with the production of 11,000 units of this part are as follows:

Direct materials $25,000

Direct labor 34,000

Variable indirect production costs 65,000

Fixed indirect production costs 40,000

Total costs $164,000

A supplier is willing to sell 11,000 units of the part to Jeff Company for $12.50 per unit. When examining the fixed indirect production costs, Jeff Company determines $10,000 is avoidable.

Required:

A) If there are no alternative uses for the facilities, should Jeff Company take advantage of the supplier's offer?