Stinson Industries has been evaluating whether the company should continue manufacturing a component or buy it from an outside supplier.A $100 cost per unit to manufacture 4,000 units was determined as follows:

Direct material: 15

Direct labor: 40

Variable manufacturing overhead: 10

Fixed manufacturing overhead: 35

Total: 100

Garvin Inc. has proposed to sell the component to Stinson for $95 per unit.If the component is obtained from Garvin, Stinson's unused production facilities could be rented to another company for $50,000 per year.In addition, $10 of the $35 in fixed manufacturing overhead could be avoided.

REQUIRED: Indicate if Stinson should make or buy the component and the total dollar difference in favor of that alternative.