Saccamano Company is currently manufacturing Part KAV-71, producing 35,000 units annually. The part is used in the production of several products made by Saccamano. The cost per unit for KAV-71 is as follows:

Of the total fixed overhead assigned to KAV-71, $12,950 is direct fixed overhead (the annual lease cost of machinery used to manufacture Part KAV-71), and the remainder is common fixed overhead. An outside supplier has offered to sell the part to Saccamano for $64. There is no alternative use for the facilities currently used to produce the part. No significant non-unit-based overhead costs are incurred.
Required:
1. Should Saccamano Company make or buy Part KAV-71?
2. What is the maximum amount per unit that Saccamano would be willing to pay to an outside supplier?LO1

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Direct materials $53.80 Direct labor 12.00 Variable overhead 2.75 Fixed overhead 1.30 Total $69.85