Smith Company manufactures widgets. Richardson Company has approached Smith with a proposal to sell the company one of the components used to make widgets at a price of $100,000 for 50,000 units. Smith is currently making these components in its own factory. The following costs are associated with this part of the process when 50,000 units are produced:

Direct material     $ 54,000
Direct labor                 $ 20,000

Manufacturing overhead  $ 70,000

Total                           $144,000

The manufacturing overhead consists of $38,000 of costs that will be incurred regardless of whether the order is accepted or not. What is the total cost that Smith will incur if it buys the components from Richardson Company? 

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