Ned Flanders Corporation makes 100,000 units per year of a plastic gasket for use in one of its products. Data concerning the unit production costs of the one gasket follow:

Direct materials................................................ $0.15

Direct labor......................................................... 0.10

Variable manufacturing overhead...................... 0.13

Fixed manufacturing overhead........................... 0.24

Total manufacturing cost per unit.................... $0.62

An outside supplier has offered to sell Ned Flanders Corporation all of the gaskets it requires. If Flanders Corporation decided to discontinue making and instead buys the gaskets, 25% of the above fixed manufacturing overhead costs could be avoided.

Required:

Assume Ned Flanders Corporation has no alternative use for the facilities presently devoted to production of the gaskets.

1. What are two considerations other than money that Flanders should think about before making the decision to make the component versus buying the component.
2. If the outside supplier offers to sell the gaskets to Flanders for $0.46 each, should Ned Flanders Corporation accept the offer to buy the gaskets or continue to make them? Fully support your answer using relevant cost analysis.