Question: Baired Shoe Corporation produces and sells shoewear. Cost data for this year's production of eight-inch spike heels is as followers:

Direct Materials..............................$6.5

Direct labor.....................................$2.75

Factory overhead(70% variable)....$2.00

Delivery expense (40% variable)....$2.50

*per unit

Squibs Foot wear, inc. has offered to provide Baird with all of its eight-inch spike heel needs for $11.00 per pair. If Baird accepts this offer, only 20% of the fixed factory overhead could be eliminated. Since Baird would no longer be making the spiked heels, the variable delivery expense would no longer be incurred. There is no alternative use for Baird's spiked heel production facilities. What will be the effect on Baird's profit if the spike heels are purchased from Squib?