Make or Buy Assignment

RJ Electronics manufacturing a variety of computer appliances. An outside supplier offered to sell a Headset called Genius to RJ Electronics for $28 per unit

To evaluate this offer, RJ has gathered the following information relating to its own cost of producing the Headsets internally:

Details	16,000 unit per year
Direct materials	160,000
Direct labor	128,000
Variable manufacturing overhead	96,000
Fixed manufacturing overhead traceable	80,000
Fixed manufacturing overhead common but allocated to headset line	224,000
Total Cost	688,000

Required:

Assuming that traceable overhead includes 30% headset line maintenance and 70% advertising for headsets only, should the outside suppliers offer be accepted?

Analysis should be done based on both total and differential approaches.