Haver Company currently produces component RX5 for one of its products. The current cost per unit to manufacture the required 50000 units of RX5follows

Direct materials $ 5.00

Direct labor $ 8.00

Overhead $ 9.00

Total cost per unit $22.00

Direct materials and direct labor are 100% variable . Overhead is 80% fixed. An outsider supplier has offered to supply the 50000 units of RX5 for $18.00 per unit .

Determine the total incremental cost of making 50000 units of RX5

Determine the total incremental cost of buying 50000 units of RX5

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