Compute the annual impact on the company's net income as a result of buying the part from the outside supplier.

Compute the minimum selling price per unit.

If the purchaser is willing to pay the company a price of $39.60 per unit, compute the operating income from this special order.

ABC Company manufactures machinery parts to be used in its various products. One of the parts manufactured is H12. The production cost per unit for H12 based on annual production requirement is as follows: Direct materials 4.50 Direct labor 3.00 Variable overhead 2.00 Fixed overhead 3.50 Annual production requirement 35,000 units 70,000 of the total fixed overhead is direct fixed overhead and the remaining is common fixed overhead. An outside supplier has offered to sell the part to the company for: $ 10.00ABC Company manufactures a Product S and the per unit data pertaining to this product are as follow: Sale price $ 45.60 Direct materials 9.60 Direct labor 12.00 Variable overhead 10.80 Fixed overhead 3.60 The company has sufficient capacity to accept a special order for 48,000 units that it just received. Selling costs associated with this order would be $ 3.60 per unit