Han Products manufactures 17,000 units of part S6 each year for use on its production line. At this level of activity, the cost per unit for part S6 is:

Direct materials	$ 4.40
Direct labor	6.00
Variable manufacturing overhead	3.80
Fixed manufacturing overhead	15.00

Total cost per part $ 29.20

An outside supplier has offered to sell 17,000 units of part S6 each year to Han Products for $39.50 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S6 could be rented to another company at an annual rental of $354,100. However, Han Products has determined that twothirds of the fixed manufacturing overhead being applied to part S6 would continue even if part S6 were purchased from the outside supplier.

Required:

Calculate the per unit and total relevant cost for buying and making the product? (Round your Per Unit answers to 2 decimal places.)

	Per Unit Differential Costs		17,000 Units
	Make	Buy	Make	Buy
Cost of purchasing
Cost of making:
Direct materials
Direct labor
Variable overhead
Fixed overhead
Total cost	$ 0.00	$ 0.00	$ 0	$ 0

How much will profits increase or decrease if the outside suppliers offer is accepted?

Profit would

by