23.)

Options:

a. Purchase price of the component

b. Variable manufacturing costs

Lockrite Security Company manufacturers home alarms. Currently, it is manufacturing one of its components at a total cost of $41 which includes fixed costs of $16 per unit. An outside provider of this component has offered to sell Lockrite the component for $30. What is the cost savings for continuing to make the component? Differential cost to purchase: Differential cost to manufacture: Cost savings from continuing to make the component