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The Fortune Company produces 15,000 units of Part QT34 annually at a total cost of $600,000. Part QT34 is a critical element to the company's

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The Fortune Company produces 15,000 units of Part QT34 annually at a total cost of $600,000. Part QT34 is a critical element to the company's main product. Data related to QT34 follows: Direct materials $70,000 Direct labor 130,000 Manufacturing overhead 300.000 Total $600.000 Manufacturing overhead is 30% variable. The Xu Company has offered to supply all 15,000 units of Part QT34 per year for $30 per unit. If Fortune accepts the offer, $106,000 of the fixed overhead would be avoided. In addition, some of Fortune's leased facilities could be vacated, reducing lease payments by $80,000 per year. Required: Would you recommend that Fortune Company accept Xu Company's offer? Why or why not

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