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Davis Company currently buys a component part for $710 per unit. Davis estimates that moking the part would require $5.60 per unit of direct materials

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Davis Company currently buys a component part for $710 per unit. Davis estimates that moking the part would require $5.60 per unit of direct materials and $3.10 per unit of direct labor. Davis normally applies overheod using a predetermined overhead rate of 125% of direct labor cost. Davis estimates. inciemental overhead of $2.60 per unit to make the part. The net incremental cost or savings of making the component is: Mutiple Chaice 54.20 savings per unit. $4.20 cost per unit. $5.20 savings per unit $5.20cos per unit. 5155cos per int

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