Sunshine State Farm sells premium quality oranges and other citrus fruits by mail-order. Protecting the fruit during shipping is important, so the company has designed and produces shipping boxes. The annual cost of 80,000 boxes is:

$
Materials	120,000
Labour	20,000
Overhead: Variable Fixed	16,000 60,000
Total	216,000

Therefore, the cost per box averages $2.70

Suppose Fresh Co. submits a bid to supply Sunshine State Farm with boxes for $2.40 per box. Sunshine State Farm must give Fresh Co. the box design specifications, and the boxes will be made according to those specs.

Required:

1. How much, if any, would Sunshine State Farm save by buying the boxes from Fresh Co.