Gelb Company currently manufactures 43,500 units per year of a key component for its manufacturing process. Variable costs are $5.15 per unit, fixed costs related to making this component are $85,000 per year, and allocated fixed costs are $74,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.90 per unit. Calculate the total incremental cost of making 43,500 units and buying 43,500 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier?

Costs to Costs to Outside Make Buy Supplier Calculate the total incremental cost of buying 43,500 units. (Round "purchase price per unit" answers to 2 decimal places.) Incremental Costs to Buy Relevant Relevant Total Amount Fixed Relevant per Unit Costs Costs Purchase price per unit Total incremental cost to buy Costs to Costs to Outside Make Buy Supplier Should it continue to manufacture the component, or should it buy this component from the outside supplier? Should Gelb make the part or purchase it from the outside supplier? per Unit