McGraw 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 $18 per unit. If McGraw Company stops producing the part internally, one-third of the fixed manufacturing overhead would be eliminated. Assume that direct labor is a variable cost.

Required:

Prepare an analysis showing the annual financial advantage or disadvantage of accepting the outside supplier's offer.