Calculate the total incremental cost of making 70k units

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Reference no: EM131810477

Gilberto Company currently manufactures 70,000units per year of one of its crucial parts. Variable costs are $3.20 per unit, fixed costs related to making this part are $70,000 per year, and allocated fixed costs are $35,000 per year.

Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.40 per unit guaranteed for a three-year period.

Calculate the total incremental cost of making 70,000 units.

Reference no: EM131810477

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