Johnson Manufacturing incurs unit costs of $7.88 ($5.09 variable and $2.79 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 12,600 of the assembly part at $5.54 per unit. If the offer is accepted, Johnson will save all variable costs but no fixed costs. Instructions: Prepare an analysis showing the total cost savings, if any, Johnson will realize by buying the part. Explain why Johnson Company should continue to make or buy the part.