York Hotel currently launders all of its towels and sheets in the basement of the hotel. The company's accounting department has reported the following annual costs of laundering internally. York Hotel Laundry Production Costs For the Year Ended December 31, 2020 Per kg 5,000 kg Operating supplies $5 $25,000 Direct labour 14 70,000 Housekeeping supervisor 8 40,000 Depreciation of laundry equipment 4 20,000 Allocated fixed costs 9 45,000 Total costs $40 $200,000 An external company has offered to process 5,000 kg of laundry per year at a price of $18 per kg. Also consider the following information: