High value Incorporated manufactures a moderately priced set of lawn furniture (a table and four chairs) that it sells for $260. The company currently manufactures and sells 6,700 sets per year. The manufacturing costs include $92 for direct materials and $52 for direct labor per set. The overhead charge per set is $42, which consists entirely of fixed costs. Assume that High value currently purchases the chair cushions for its lawn set from an outside vendor for $22 per set. High value's chief operations officer wants an analysis of the comparative costs of manufacturing these cushions to determine whether bringing the manufacturing in-house would save the company money. Additional information shows that if Highvalu were to manufacture the cushions, the direct materials cost would be $8 and the direct labor cost would be $6 per set. In addition, to produce the cushions, Highvalu would have to purchase cutting and sewing equipment, which would add $17,000 to annual fixed costs. Required:
1. What is the total relevant cost per year to purchase the chair cushions from the outside supplier?