(Answered) Question - haver company currently produces component rx5

Accounting

Question - Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 67,000 units of RX5 follows.

Direct materials $ 4.00

Direct labor 8.00

Overhead 9.00

Total costs per unit $ 21.00

Direct materials and direct labor are 100% variable. Overhead is 80% fixed. An outside supplier has offered to supply the 67,000 units of RX5 for $20.00 per unit.

Required: Calculate the total incremental costs of making and buying component RX5.

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