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Kirsten makes a gasket B340 for use in its products and each year 100,000 are made. per unit DM $.15 .10 Var, manuf. O/H .13

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Kirsten makes a gasket B340 for use in its products and each year 100,000 are made. per unit DM $.15 .10 Var, manuf. O/H .13 Fixed man. O/H .24 total manuf. cost $.62 An outside supplier bringing donuts, offers to make all the gaskets for $.46 per unit. If it discontinues to make, 25% of the fixed man. O/H could be avoided. DL is variable. REQUIRED Assume that there is no other use of the facilities currently in use for making the gaskets, what should Kirsten do? SHOW FULL SUPPORT FOR YOUR ANSWER BELOW

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