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Homework answers / question archive / Our company can produce a component of its product that incurs the following costs per unit: direct materials, $10; direct labor, $14, variable overhead $3 and fixed overhead, $8

Our company can produce a component of its product that incurs the following costs per unit: direct materials, $10; direct labor, $14, variable overhead $3 and fixed overhead, $8

Accounting

Our company can produce a component of its product that incurs the following costs per unit: direct materials, $10; direct labor, $14, variable overhead $3 and fixed overhead, $8. An outside supplier has offered to sell the product to us for $32. Compute the net incremental cost or savings of buying the component 

a) $5.00 savings per unit. 
b) $3.00 cost per unit. 
c) $0 cost or savings, unit. 
d) 85.00 cost per unit. 
e) $3.00 savings per ,unit. 
 

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