Mother Hubbard Company purchases 8,000 units of a part that it needs for production of its product. Notification has just been received from the supplier that a price increase will take effect shortly, which will bring the price of each part to $25. Mother Hubbard Company is considering using some idle facilities to produce the part. The production costs to produce the needed 8,000 parts are as follows:

Direct materials $17,500

Direct labor 30,000

Variable factory overhead 14,000

Fixed factory overhead 33,500

The idle facilities could also be rented out at an annual rent of $99,000. All the factory overhead costs are avoidable.

Required: Determine if Mother Hubbard Company should continue to buy the part or produce it in-house.