Question - Gelb Company currently manufactures 50,500 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $69,000 per year, and allocated fixed costs are $70,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit.
Calculate the total incremental cost of making 50,500 units. (Round "variable cost per unit" answer to 2 decimal places.)
Calculate the total incremental cost of buying 50,500 units. (Round "purchase price per unit" answer to 2 decimal places.)