TM Ltd. currently manufactures Part XMB, which is used in one of its products. At its production level of 2,700 units, the unit product cost of Part XMB is as follows:

Cost Dollar amount

Direct labour $7.75

Direct materials 3.75

Manufacturing overhead

(35% is variable) 16.00

A supplier, Tam Co., has offered to sell TM Ltd. 2,700 units of Part XMB. TM Ltd. has determined that if it purchases the part externally, all variable costs will be avoidable, and one quarter of the fixed manufacturing overhead is avoidable.

In determining whether to accept Tam Co.s offer, what are the relevant costs to TM of manufacturing the parts internally (cost to make)?