Gilberto Company currently manufactures 60,000units per year of one of its crucial parts. Variable costs are $3.60 per unit, fixed costs related to making this part are $60,000 per year, and allocated fixed costs are $30,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.00 per unit guaranteed for a three-year period.
Calculate the total incremental cost of making 60,000 units. (Round cost per unit answers to 2 decimal places.)
Calculate the total incremental cost of buying 60,000 units. (Round cost per unit answers to 2 decimal places.)