40. Millburg Corporation is trying to decide whether to continue making a component of its product or start purchasing it from an outside firm. Current per-unit manufacturing costs of the component are as follows:

Millburg can buy the component from another company for $9.50 per unit. Millburg plans to use 3,000 components this year.
Determine whether it would be financially beneficial for Millburg to purchase the component from the outside firm, and calculate the net benefit.

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Direct materials $ 3.00 Direct labor Variable overhead Fixed overhead Total 4.50 0.75 2.00 $10.25