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Gelb Company currently manufactures 46,000 units per year of a key component for its manufacturing process. Variable costs are $2.95 per unit, fixed costs related
Gelb Company currently manufactures 46,000 units per year of a key component for its manufacturing process. Variable costs are $2.95 per unit, fixed costs related to making this component are $87,000 per year, and allocated fixed costs are $73,500 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 $3.70 per unit. Calculate the total incremental cost of making 46,000 units and buying 46,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Calculate the total incremental cost of making 46,000 units. (Round "variable cost per unit" answers to 2 decimal places.) Calculate the total incremental cost of buying 46,000 units. (Round "purchase price per 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
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