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Han Products manufactures 16,000 units of part 5-6 each year for use on its production line. At this level of activity, the cost per unit

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Han Products manufactures 16,000 units of part 5-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $5.30 7.00 240 18.00 Total cost per part $ 3270 An outside supplier has offered to sell 16.000 units of part 5-6 each year to Han Products for $47.50 per part. If Han Products accepts this offer the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $433,800. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part 5-6 would continue even if part 5-6 were purchased from the outside supplier. Required: a. Calculate the per unit and total relevant cost for buying and making the product? (Round your "per unlt" answers to 2 decimal places.) Per Unit Differential Costs Make Buy 16,000 Units Make Buy Cost of purchasing Cost of making: Direct materials Direct labor Variable overhead Foed overhead Total cost S0.00 $0.00 $ 0 $ b. How much will profits increase or decrease if the outside supplier's offer is accepted? Profit would

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