Question - Vintech Manufacturing incurs unit costs of $7 ($5 variable and $2 fixed) in making a subassembly part for its finished product. A supplier offers to make 17,900 of the part at $5.70 per unit. If the offer is accepted, Vintech will save all variable costs but no fixed costs.
Prepare an analysis showing the total cost saving, if any, Vintech will realize by buying the part.