Climate-Control, Inc., manufactures a variety of heating and air-conditioning units. The company is currently manufacturing all of its own component parts. An outside supplier has offered to sell a thermostat to Climate-Control for $46 per unit. To evaluate this offer, Climate-Control, Inc., has gathered the following information relating to its own cost of producing the thermostat internally:

Per Unit

15,600 Units

per year

Direct materials

$

13

$

202,800

Direct labor

15

234,000

Variable manufacturing overhead

2

31,200

Fixed manufacturing overhead, traceable

9*

140,400

Fixed manufacturing overhead, common, but allocated

17

265,200

Total cost

$

56

$

873,600

*40% supervisory salaries; 60% depreciation of special equipment (no resale value).

Assuming that the company has no alternative use for the facilities now being used to produce the thermostat, compute the total cost of making and buying theparts.