Make$-$or$-$Buy, Traditional Analysis

Wehner Company is currently manufacturing Part ABS$-43,$ producing $50,500$ units annually. The part is used in the production of several products made by Wehner. The cost per unit for ABS$-43$ is as follows:

Direct materials $$43\mathrm{.}25$

Direct labor $8\mathrm{.}80$

Variable overhead $2\mathrm{.}40$

Fixed overhead $4\mathrm{.}10$

Total $$58\mathrm{.}55$

Of the total fixed overhead assigned to ABS$-43,$ $$15,100$ is direct fixed overhead $($the annual lease cost of machinery used to manufacture Part ABS$-43),$ and the remainder is common fixed overhead. An outside supplier has offered to sell the part to Wehner for $$54\mathrm{.}26.$ There is no alternative use for the facilities currently used to produce the part. No significant non$-$unit$-$based overhead costs are incurred.

Required:

$1.$ Should Wehner Company make or buy Part ABS$-43?$

Wehner should

buy

the part. This will produce total cost savings of $fill in the blank $2$