Davis Company currently buys a component part for $8.00 per unit. Davis estimates the making the part would require $6.50 per unit of direct materials and $4.00 per unit of direct labor. Davis normally applies overhead using a predetermined overhead rate of 125% of direct labor cost. Davis estimates incremental overhead of $3.50 per unit to make the part. The net incremental cost or savings of making the component is: Multiple Choice $6.00 savings per unit. $6.00 cost per unit. $7.00 savings per unit. $7.00 cost per unit. $2.00 cost per unit.