Haver company currently produces component rx5 for its sole

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Reference no: EM13593168

Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 69,000 units of RX5 follows.


Direct materials	$	4.00
Direct labor		7.00
Overhead		8.00

Total costs per unit	$	19.00

Direct materials and direct labor are 100% variable. Overhead is 60% fixed. An outside supplier has offered to supply the 69,000 units of RX5 for $21.00 per unit.

Required:

1.	Calculate the per unit incremental costs of making and buying component RX5.

Reference no: EM13593168

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