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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.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M9970745

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