Han Products manufactures 18,000 units of part S-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	$	4.00
Direct labor		7.00
Variable manufacturing overhead		4.10
Fixed manufacturing overhead		12.00
Total cost per part	$	27.10

An outside supplier has offered to sell 18,000 units of part S-6 each year to Han Products for $48.50 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 $544,200. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-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 unit" answers to 2 decimal places.)

Per unit diff 18,000 units

	Make	Buy	Make	Buy
Cost of Purchasing	?	?	?	?
Cost of Making:
Direct Materials	?		?
Direct Labor	?		?
Variable Overhead	?		?
Fixed Overhead	?		?
Total Cost	?	?	?	?

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

Profit would: ?

By: ?