Han Products manufactures 22,000 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 $ 4.30 Direct labor 6.00 Variable manufacturing overhead 2.40 Fixed manufacturing overhead 15.00 Total cost per part $ 27.70

An outside supplier has offered to sell 22,000 units of part S-6 each year to Han Products for $40.00 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 $477,600. 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.)

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