Gilberto Company currently manufactures 90,000 units per year of one of its crucial parts. Variable costs are $3.20 per unit, fixed costs related to making this part are $100,000 per year, and allocated fixed costs are $87,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $4.40 per unit guaranteed for a three-year period.

Calculate the total incremental cost of making 90,000 and buying 90,000 units. Should the company continue to manufacture the part, or should it buy the part from the outside supplier?

Gilberto Company currently manufactures 90,000 units per year of one of its crucial parts. Variable costs are $3.20 per unit, fixed costs related to making this part are $100,000 per year, and allocated fixed costs are $87,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $4.40 per unit guaranteed for a three-year period. Calculate the total incremental cost of making 90,000 and buying 90,000 units. Should the company continue to manufacture the part, or should it buy the part from the outside supplier? Complete this question by entering your answers in the tabs below. Outside Costs to Make Costs to Buy Supplier Calculate the total incremental cost of making 90,000 units. (Round cost per unit answers to 2 decimal places.) Incremental Costs to Make Relevant Amount per Relevant Fixed Unit Costs Total Relevant Costs Variable cost per unit Fixed manufacturing costs Totat incremental cost to make 0 Coots to Buy > Supplier ences Calculate the total incremental cost of buying 90,000 units. (Round cost per unit answers to 2 decimal places Incremental Costs to Buy Relevant Amount Relevant Fixed Costs Total Relevant Costs per Unit Purchase price per unit Total incremental cost to buy Should the company continue to manufacture the part, or should it buy the part from the outside supplier? Should Gilberto make the part or purchase it from the outside supplier?