Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 62,000 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 70% fixed. An outside supplier has offered to supply the 62,000 units of RX5 for $19.00 per unit.
Required:
1. Determine the total incremental cost of making 62,000 units of RX5.
2. Determine the total incremental cost of buying 62,000 units of RX5.
3. Should the company make or buy RX5?

If the findings and the results are not presented properly, the research completed was a waste of time and money. true false

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