Hart Company currently produces a component that it uses in making some of its products. Hart has calculated the following costs for making the part:
Unit-level costs
Materials $20
Labor 28
Overhead 2
Allocated facility-level costs 10
Total cost $60
Hart is considering outsourcing the component. A supplier has offered to sell the component to Hart for $54 each. Hart needs 10,000 units each year.
Required:Should Hart outsource the component? Support your answer with appropriate computations.