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Ivanhoe Manufacturing incurs unit costs of $ 8 . 0 0 ( $ 5 . 0 0 variable and $ 3 . 0 0 fixed

Ivanhoe Manufacturing incurs unit costs of $8.00( $5.00 variable and $3.00 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 16,200 of the parts for $5.40 per unit. If it accepts the offer, Ivanhoe will save all variable costs and $1.00 of fixed costs.
Prepare an analysis showing the total cost savings, if any, that Ivanhoe will realize by buying the part. (Round per unit answers to 2 decimal places, eg.15.25. If an amount reduces the net income then enter with a negative sign preceding the number, eg.-15,000 or parenthesis, eg.(15,000).)
Per Unit
Make
Number of units:
Variable manufacturing costs
The decision should be to
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