Bamey Enterprises manufactures one of the components used to assemble its main company product. Specialty Products, Inc., has offered to make the component at a cost of $$13\mathrm{.}10$ per unit. Barney Enterprises' current cost is $$15\mathrm{.}00$ per unit of the component, based on the $95,000$ components that Barney Enterprises currently produces.

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This current cost per unit is based on the following calculations:

$($Click the icon to view the information.$)$

None of Barney Enterprises' fixed costs will be eliminated if the component is outsourced. However, the freed capacity could be used to build a new product. This new product would be expected to generate $$31,000$ of contribution margin per year.

Requirement $1.$ If Bamey Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much? $($Enter a $"0"$ for any zero balances. Use a minus sign or parentheses in the Difference column when the cost to make exceeds the cost to buy.$)$

$\backslash$table$[[$Incremental Analysis,Make,Outsource$],[$Outsourcing Decision,Component,Component$],[$Variable costs,,$],[$Plus: Fixed costs,,$],[$Total cost of $95,000$ components,,$],[$Less: Profit from another product,,$],[$Net cost$,,]]$

Data table

Requirements

If Barney Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much?

What is the maximum price per unit Barney Enterprises would be willing to pay if it outsources the component?