17 Davis Company currently buys a component part for $6.30 per unit. Davis estimates that making the part would require $4.80 per unit of direct materials and $2.30 per unit of direct labor. Davis normally applies overhead using a predetermined overhead rate of 125% of direct labor cost. Davis estimates incremental overhead of $1.80 per unit to make the part. The net incremental cost or savings of making the component is: Multiple Choice O $2.60 savings per unit. $2.60 cost per unit. $3.60 cost per unit. $3.60 savings per unit. $1.15 cost per unit.

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