Carolina manufactures an AC unit called GB231. Variable manufacturing costs per unit of GB231 are as follows:

Direct materials	$23.22
Direct labor	$15.50
Variable manufacturing overhead	$7.53

The Wood Company has offered to sell Carolina 6,500 units of GB231 for $37.80 per unit. If Carolina accepts the offer, $65,000 of fixed manufacturing overhead will be eliminated.

Applying differential analysis to the situation, what should Carolina do?

a. Calculate whether the outsourcing will be a savings or cost more.

Round to 0 decimals. If outsourcing is more than manufacturing, the amount should be entered with a negative(-)

b. Make or Buy? enter Make or Buy

Carolina manufactures an AC unit called GB231. Variable manufacturing costs per unit of GB231 are as follows:

Direct materials	$23.22
Direct labor	$15.50
Variable manufacturing overhead	$7.53

The Wood Company has offered to sell Carolina 6,500 units of GB231 for $37.80 per unit. If Carolina accepts the offer, $65,000 of fixed manufacturing overhead will be eliminated.

Applying differential analysis to the situation, what should Carolina do?

a. Calculate whether the outsourcing will be a savings or cost more.

Round to 0 decimals. If outsourcing is more than manufacturing, the amount should be entered with a negative(-)

b. Make or Buy? enter Make or Buy