Camino Jet Engines Corporation (Continued) The company is planning to introduce a new engine. The engine requires a special part that the company can either make or buy from an outside supplier. The lowest outside price for the part is $87,000 per unit. If the part is produced internally, the company will have to purchase new equipment that will yield annual depreciation of $156,000. The company will also need to rent a new production facility at $240,000 a year. Fixed overhead is allocated to all production using a predetermined overhead rate of 55% of direct labor. However, these overhead costs would not be avoided if the part were not produced. The company plans to produce 24 engines with this part per year. A preliminary analysis of the annual costs to produce 24 parts would be as follows: Direct materials Direct labor 672,000 816,000 Variable overhead 240,000 Equipment depreciation 156,000 Building rental 240,000 Allocated fixed overhead 448,800 Total Required: 2,572,800 1. Calculate the incremental cost to produce 24 units of this part. There are no opportunity costs. 2. Compare the incremental cost determined in 1) to the cost to buy the part. 3. Decide whether it is better for the company to make or buy this part? Please explain your answer. Show your answers and calculations