My manager is racist

So a couple of days ago I found out my manager is racist. Me and a coworker were talking about the show Big Brother, and one of the contestants said the N word twice. My manager asked what we were talking about and my coworker says something along the lines of ‘we thought we were going to like him until he said the N word’. To which my manager replies, in the most casual way ‘oh don’t worry, you’re allowed to say that word here’... It was a very cringeworthy moment and I was VERY uncomfortable. Everybody at my workplace is white, including the manager 🤦‍♀️

I’m actually debating reporting her to our boss.