Garcia Company produces a part that is used in the manufacture of one of its products. The annual costs associated with the production of 5,000 units of this part are as follows:
Direct materials $108,000
Direct labor 1,56,000
Variable factory overhead 72,000
Fixed factory overhead 1,68,000
Total costs $504,000
Of the fixed factory overhead costs, $72,000 are avoidable. Another company has offered to sell 5,000 units of the same part to Garcia for $105.60 per unit. The facilities currently used to make the part can be rented out to another manufacturer for $72,000 per year. What should Garcia Company do?