Make or by product.Montrose incorportaion manufactures part 345 for use in one of its main products. normal annual production for part 345 is 100,000 units. the cost for 100 units lot for the part follows:

Direct material.$260

direct labor100

Factory overhead:

variable 120

fixed160

total cost per 100 units.640

kalispel incormporation has offered to sell Montrose all 100,000 units it will need during coming year for $600 per 100 units. if montrose accepts the offer from kalispiel, the facilities used to manufacure part 345 can be used in production of part 789. this change would save montrose $90000 in fixed cost related to the rental of capacity neccesaary to produce part 789. in addition a $50000 cost item included in factory overhead which specifically related to part 345( rental of special equipment not usable in manufacturing of other products) would be eliminated.

Required. determine whether or not Montrose incorporataion make part 345 or but it from kalispiel inc for $600 per unit