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.

If Jeff Company decides to buy the part from the suppler, Jeff Company can rent out the idle facilities for $50,000 per year. Should Jeff Company take advantage of the supplier's offer?