Craydye Corporation manufactures a part for its production cycle. The costs per unit for 8,000 units of this part are as follows:

Direct materials	$ 24
Direct labor	42
Variable overhead	15
Fixed overhead	25
Total	$106

Zinkyl Company has offered to sell Craydye Corporation 8,000 units of the part for $120 per unit. If Craydye Corporation accepts Zinkyl Company's offer, total fixed overhead will be reduced by $40,000. What alternative is more desirable and by what amount is it more desirable?

Alternative

Amount

a.Buy; $170,000

b.Make; $220,000

c.Buy; $188,000

d.Make; $72,000

The following information relates to a product produced by Marigold Company:

Direct materials	$20
Direct labor	10
Variable overhead	20
Fixed overhead	15
Unit cost	$65

Fixed selling costs are $650,000 per year, and variable selling costs are $10 per unit sold. Although production capacity is 400,000 units per year, the company expects to produce only 250,000 units next year. The product normally sells for $100 each. A customer has offered to buy 40,000 units for $80 each. The incremental cost per unit associated with the special order is:

a.$76.

b.$90.

c.$60.

d.$84.