Direct materials: $162,000

Direct Labor: $36,000

Factory overhead: Variable: $72,000

Fixed: $90,000

Total manufacturing cost: $360,000

Cost per unit: $360,000/18,000=20

Assume that if the solenoids are purchased from the outside source, the manufacturing space previously used to produce them can be used to manufacture an additional 5,000 electric wire harnesses used in the installation of home generators. The wire harnesses have an estimated contribution margin of $3 per unit. Manufacturing additional wire harnesses would have no effect on fixed factory overhead. Compute incremental cost or benefit of buying the solenoids from the outside source and using the factory space to produce additional wire harnesses.

Contribution margin of Alternative use of factory space: _$_______________

Incremental benefit of buying solenoids from an outside source and using space to produce additional wire harnesses: _$_____________________