Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 65,000 units of RX5 follows.

Direct materials	$	4.00
Direct labor		8.00
Overhead		9.00
Total costs per unit		21.00

Direct materials and direct labor are 100% variable. Overhead is 80% fixed. An outside supplier has offered to supply the 65,000 units of RX5 for $19.00 per unit. Required: 1. Calculate the incremental costs of making and buying component RX5.

Making the units Buying the units Total incremental costs of: Total direct labor Cost to buy the units Variable overhead costs Total direct materials Total costs Should the company continue to manufacture the part, or should it buy the part from the outside supplier? Make the units