Walton Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. Walton produces and sells only 7,300 bikes each year. Due to the low volume of activity, Walton is unable to obtain the economies of scale that larger producers achieve. For example, Walton could buy the handlebars for $39 each; they cost $42 each to make. The following is a detailed breakdown of current production costs. Item Unit Cost Total Unit-level costs Materials $ 16 $ 116,800 Labor 12 87,600 Overhead 2 14,600 Allocated facility-level costs 12 87,600 Total $ 42 $ 306,600 After seeing these figures, Waltons president remarked that it would be foolish for the company to continue to produce the handlebars at $42 each when it can buy them for $39 each. Required Calculate the total relevant cost. Do you agree with the presidents conclusion?