The Blade Division of Axe Company produces hardened steel blades. One-third of Blade's output is sold to the Forestry Products Division of Axe; the remainder is sold to outside customers. Blades' estimated operating profit for the year is:

		Forestry Division		Outside Customers
Sales	$	32,000	$	74,000
Variable costs		(11,700)		(23,400)
Fixed costs		(3,850)		(6,425)
Operating profits	$	16,450	$	44,175
Unit sales		11,700		23,400

The Forestry Division has an opportunity to purchase 11,700 blades of the same quality from an outside supplier on a continuing basis. The Blade Division cannot sell any additional products to outside customers. Should the Axe Company allow its Forestry Division to purchase the blades from the outside supplier at $2.10 per unit?

	No; making the blades will save Axe $19,605.
	Yes; buying the blades will save Axe $12,870.
	Yes; buying the blades will save Axe $19,605.
	No; making the blades will save Axe $12,870.