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Why are my answers wrong? This window shows what is correct and incorrect for the work you have completed so far. ven if all of the work you have done so far is correct, you may not have completed everything. 2. value 1.16 points Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 50,000 units of RX5 follows. Direct materials Direct labor Overhead $5.00 8.00 9.00 Total costs per unit 22.00 Direct materials and direct labor are 100% variable. Overhead is 80% fixed. An outside supplier has offer to supply the 50,000 units of RX5 for $18.00 per unit. Required: 1. Calculate the incremental costs of making and buying component RX5

Explanation / Answer

Total incremental costs of: Making the units Buying the units Total direct materials 250000 Total direct labor 400000 Variable overhead costs 90000 Cost to buy the units 9,00,000 Total costs 740000 900000 Should the company continue to manufacture the part, or should it buy the part from the outside supplier? make the units

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