Curtis Corporation is beginning to manufacture Mighty Mint, a new mouthwash in a small spray container.The product will be sold to wholesalers and large drugstore chains in packages of 30 containers for $18 per package.Management allocates $200,000 of fixed manufacturing overhead costs to Mighty Mint.The manufacturing costs per package of Mighty Mint for expected production of 100,000 packages is as follows:

Direct material$ 6.50

Direct labor$ 3.50

Overhead (fixed and variable)$ 3.00

Total$13.00

The company has contacted a number of packaging suppliers to determine whether it is better to buy or manufacture the spray containers. The lowest quote for the containers is $1.75 per 30 units.It is estimated that purchasing the containers from a supplier would save 10% of direct materials, 20% of direct labor, and 15% of variable overhead.Curtis manufacturing space is highly constrained.By purchasing the spray containers, the company will not have to lease additional manufacturing space that is estimated to cost $15,000 per year.If the containers are purchased one supervisory position can be eliminated.Salary plus benefits for this position are $70,000 per year.

Required:

Should Curtis make or buy the containers?What is the incremental cost (benefit) of buying the containers as opposed to making them?