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Emil Manufacturing incurs unit costs of $8.00 ($5.00 variable and $3.00 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 16,800 of the parts for $5.50 per unit. If it accepts the offer, Emil will save all variable costs and $1 of fixed costs.
Problem 1: Prepare an analysis showing the total cost savings, if any, that Emil will realize by buying the part. (Round per unit answers to 2 decimal places, e.g. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).)
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