Be careful when you use the data to determine fixed costs. And make sure you understand the two alternatives. The "make" means that KCSB makes, assembles, and ships all of its bicycles. The "buy" means that KCSB

makes, assembles, and ships some of its bicycles,

makes some of its bicycles and pays another firm to assemble and ship them, and

uses idle resources to make and sell specialty racing bicycles

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King City Specialty Bikes (KCSB) produces high-end bicycles. The unit costs to manufacture and market the bicycles at last year's volume level of 2,100 bicycles per month are shown in the following table:

Unit manufacturing costs
Variable	$248
Fixed	109
Total unit manufacturing costs		$357
Unit nonmanufacturing costs
Variable	57
Fixed	149
Total unit nonmanufacturing costs		206
Total unit costs		$563

KCSB expects to produce and sell 2,350 bicycles per month in the coming year. The bicycles sell for $580 each.

KCSB receives a proposal from an outside contractor who, for $160 per bicycle, will assemble 850 bicycles per month and ship them directly to KCSB's customers as orders are received from KCSB's sales force. KCSB would provide the materials for each bicycle, but the outside contractor would assemble, box, and ship the bicycles. The variable manufacturing costs would be reduced by 40% for the 850 bicycles assembled by the outside contractor, and variable nonmanufacturing costs for the 850 bicycles would be cut by 55%.

KCSB's marketing manager thinks that it could sell 70 specialty racing bicycles per month for $6,000 each, and its production manager thinks that it could use the idle resources to produce each of these bicycles for variable manufacturing costs of $5,000 per bicycle and variable nonmanufacturing costs of $400 per bicycle.

If KCSB accepts the proposal, it would be able to save 5% of fixed manufacturing costs; fixed nonmanufacturing costs would be unchanged.

REQUIRED [Note: Round unit cost computations to the nearest cent]

What is the difference in KCSB's monthly costs between accepting the proposal and rejecting the proposal? (Note: If the costs of accepting the proposal are less than the costs of rejecting it, enter the difference as a positive number; if the accept costs are more than the reject costs, enter the difference as a negative number.)