Montreal Corporation (MC) has received an offer from an outside supplier to supply 10,000 units of parts used annually in the manufacture of its main product at $36 per unit. The following current cost data is available in the manufacture of the product:

                                           Cost to Make
                                               (per unit)
Direct materials ......................... $15
Direct labour ................................ 12
Variable overhead ........................ 4
Allocated common costs ............. 4
Supervision ................................... 6

Supervision cost of $7 per unit consists entirely of the salary of the production supervisor, who will be transferred to another department if the company decides to accept the supplier’s offer.

Required:

Should MC continue to manufacture the part or accept the outside supplier’s offer? (Show necessary calculations.)