Wheeler Company can produce a product that incurs the follow

Wheeler Company can produce a product that incurs the following co?ts per unit: direct materials, $10.70 direct labor, $24.70, and overhead, $16.70. An outside supplier has oftered to sell the product to Wheeler for $48.32.f wheeler buys from the supplier, it will still incur 40% of its overhead cost. Compute the net Incremental cost or savings of buying. O $5.61 savings per unit. O $5.61 cost per unit. O $2.90 cost per unit. O $6.24 cost per unit. O $2.90 savings per unit.

Solution

Make Buy Direct material 10.7 Direct labor 24.7 Overheads 16.7 6.68 Purchase price 48.32 Total cost 52.1 55 Increment cost 2.9 Per unit