Wings Incorporated manufactures machine parts for aircraft engines. The CEO, Chucky Valters, was considering an offer from a subcontractor that would provide 3,200 units of product PQ107 for Valters for a price of $150,000. If Wings does not purchase these parts from the subcontractor it must produce them in-house with the following unit costs:

In addition to the above costs, if Wings produces part PQ107, it would have a retooling and design cost of $13,100. The relevant costs of producing 3,200 units of product PQ107 internally are:

\begin{tabular}{lc} & Cost per Unit \\ Direct materials & $42 \\ Direct labor & 26 \\ Variable overhead & 12 \end{tabular}