Carla Corporation currently manufactures a subassembly for its main product. The costs per unit are as follows:

Direct materials		$	3.60
Direct labour			30.80
Variable overhead			15.60
Fixed overhead			26.00
Total		$	76.00

Regina Corp. has contacted Carla with an offer to sell it 5,200 subassemblies for $ 56.60 each.

Should Carla make or buy the subassemblies? Create a schedule that shows the total quantitative differences between the two alternatives. (Round all entries to 2 decimal places, e.g. 1.25.)

Cost to make		$			per unit
Cost to buy		$			per unit

Carla should: buy/ make the subassemblies.

The accountant decides to investigate the fixed costs to see whether any incremental changes will occur if the subassembly is no longer manufactured. The accountant believes that Carla will eliminate $ 56,680 of fixed overhead if it accepts the proposal. Does this new information change the decision? (Round all entries to 2 decimal places, e.g. 1.25.)

Cost to make		$	per unit
Cost to buy		$	per unit

Carla should: make/ buy the subassemblies.