Lafluer Manufacturing incurs unit costs of $7.50 ($4.50 variable and $3 fixed) in making a sub-assembly part

Question:

Lafluer Manufacturing incurs unit costs of $7.50 ($4.50 variable and $3 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 10,000 of the assembly part at $5 per unit. If the offer is accepted, Lafluer will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Lafluer will realize by buying the part.