Spahr Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part, assuming a production level of 5,000 units, are as follows:

Direct material $2

Direct Labor 4

Variable manufacturing overhead 3

Fixed manufacturing overhead 1

Total cost $10

The fixed overhead costs are unavoidable

Assume spahr company can purchase 5000 units of the part from allgood company for $13.50 each and the facilities currently used to make the part could be used to manufacture 5000 units of another product that would have a $6 per unit contribution margin. If no additional fixed costs would be incurred, what should spahr company do? Support your answer with the calculation and the change in operating income (profit).