****ANSWER IS NOT 246,400 OR 70,200

Dentech, Inc., uses 12 units of part RM67 each month in the production of dentistry equipment. The cost of manufacturing one unit of RM67 is the following: Direct material Material handling (20% of direct-material cost) Direct labor Manufacturing overhead (150% of direct labor) S 4,500 900 34,000 51,000 Total manufacturing cost S90,400 Material handling represents the direct variable costs of the Receiving Department that are applied to direct materials and purchased components on the basis of their cost. This is a separate charge in addition to manufacturing overhead. Dentech's annual manufacturing overhead budget is one-third variable and two-thirds fixed. Scott Supply, one of Dentech's reliable vendors, has offered to supply part number RM67 at a unit price of $58,000. 2. Assume Dentech is able to rent out all its idle capacity for $88,000 per month. If Dentech decides to purchase the 12 units from Scott Supply, Dentech's monthly cost for RM67 would increase (or decrease) by what amount