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Current Attempt in Progress Your answer is partially correct. Pharoah Manufacturing incurs unit costs of $8.00 ($5.00 variable and $3.00 fixed) in making a sub-assembly
Current Attempt in Progress Your answer is partially correct. Pharoah Manufacturing incurs unit costs of $8.00 ($5.00 variable and $3.00 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 16,800 of the parts for $5.50 per unit. If it accepts the offer, Pharoah will save all variable costs and $1.00 of fixed costs. Prepare an analysis showing the total cost savings, if any, that Pharoah will realize by buying the part. (Round per unit answers to 2 decimal places, e.g. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Net Income Increase Per Unit Make Buy (Decrease) 5 84000 i $ 84000 3 50400 5.50 226800 $
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