Malik Company uses 5,000 units of Part X each year as a component in the assembly of one of its products. The company is presently producing Part X internally at a total cost of $100,000, computed as follows:

Direct materials	$	15,000
Direct labor		30,000
Variable manufacturing overhead		10,000
Fixed manufacturing overhead		45,000
Total cost	$	100,000

An outside supplier has offered to provide Part X at a price of $15 per unit. If the Company stops producing the part internally, half of the fixed manufacturing overhead would be eliminated. Assume that direct labor and materials are variable costs.

Should the Company accept this offer? Show your calculations to support your recommendation.