Superior Company manufactures gear model G37, which is used in several of its farm-equipment products. Annual production volume of G37 is 40,000 units. Unit costs for G37 are as follows:

Direct materials costs	$60
Direct labor costs	35
Variable overhead costs	28
Fixed overhead costs	18
Total costs	$141

Alternatively, Superior can purchase gear model G37 from an outside supplier for $100 per unit. If G37 is outsourced,

Superior can use the facility where G37 is currently manufactured for production of another gear-model G49. This would save

Superior $113,000 in facility rental and other costs presently incurred.

Requirement

Should Superior make or buy G37? By how much will Superior be better off by choosing your decision rather than the alternative?