Coronado Industries incurs unit costs of $7 ($4 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to make 16,400 of the assembly part at $6 per unit. If the offer is accepted, Coronado will save all variable costs but no fixed costs. Provide analysis showing the total cost saving, if any, Coronado will realize by buying the part.(Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

MakeBuyNet Income

Increase (Decrease)Variable manufacturing costs$

$

$

Fixed manufacturing costs

Purchase price

Total annual cost$

$

$

The decision should be to

make

buy

the part.