Gelb Company currently manufactures 40,000 units of a key compon

Gelb Company currently manufactures 40,000 units of a key component for its manufacturing process at a cost of $4.45 per unit. Variable costs are $1.95 per unit, fixed costs related to making this component are $65,000 per year, and allocated fixed costs are $58,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Support your decision with analysis of the data provided.