McGraw Company uses $8,000$ 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 $$139,000,$ computed as follows:

An outside supplier has offered to provide Part $x$ at a price of $$19\mathrm{.}20$ 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.