Rankin, Inc. makes a range of products. The company's predetermined overhead rate is $14 per direct labor-hour, which was calculated using the following budgeted data:

Variable manufacturing overhead........$100,000 Fixed manufacturing overhead.............$250,000 Direct labor-hours.....................................25,000

Component WOC is used in one of the company's products. The unit cost of the component according to the company's cost accounting system is determined as follows:

Direct materials...........................$28 Direct labor...................................56 Manufacturing overhead applied..39.20 Unit product cost.........................$123.20

An outside supplier has offered to supply component WOC for $108 each. The outside supplier is known for quality and reliability. Assume that direct labor is a variable cost, variable manufacturing overhead is really driven by direct labor-hours, and total fixed manufacturing overhead would not be affected by this decision. Ranking, Inc. chronically has idle capacity.

Required: Is the offer from the outside supplier financially attractive? Why?