Acct&203-Incremental Analysis Chapter 24 Make or Buy Decision (Outsourcing) Essex Company is presently making a part that is used in one of its products. The unit cost to make the part is: Direct materials Direct labor Variable overhead $9 5 1 Depreciation of special equipment Supervisor's salary General factory overhead Total cost per unit 3 2 10 $30 The equipment has no resale value. General factory overhead is allocated based on direct labor hours. The above costs are based on 20,000 parts produced each year. An outside supplier has offered to provide the 20,000 parts at a cost of only $25 per part. Decide whether the offer should be accepted by doing the following: Identify relevant amounts in this decision. Compute the $ difference in favor or against accepting the offer. a. b