Laskowski Company manufactures a part for its production cycle. The annual costs per unit for 5,000 units of the part are as follows:

Per Unit

Direct materials$3.00

Direct labor5.00

Variable factory overhead4.00

Fixed factory overhead2.00

Total costs$14.00

The fixed factory overhead costs are unavoidable. Hendricks Company has offered to sell 5,000 units of the same part to Laskowski Company for $14 per unit. The facilities currently used for the part could be used to make 5,000 units annually of a new product that would contribute $5 a unit to fixed expenses. No additional fixed costs would be incurred with the new product. A) Make or Buy? B) How much will be saved?