Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 55,000 units of RX5 follows.

Direct materials$4.00Direct labor8.00Overhead9.00Total costs per unit21.00

Direct materials and direct labor are 100% variable. Overhead is 70% fixed. An outside supplier has offered to supply the 55,000 units of RX5 for $19.00 per unit.

Required:

1.Calculate the incremental costs of making and buying component RX5.