Make or Buy Terry Inc. manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an offer from a subcontractor to provide 2,200 units of product OP89 for $110,000. If Terry does not purchase these parts from the subcontractor, it must continue to produce them in-house with these costs:

1. What is the relevant cost per unit to make the product internally?

2. What is the estimated increase or decrease in short-term operating profit of producing the product internally versus purchasing the product from a supplier?

Make or Buy Terry Inc, manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an offer from a subcontractor to provide 2,200 units of product OP89 for $110,000. If Terry does not purchase these parts from the subcontractor, it must continue to produce them in-house with these costs: Direct materials Direct labor Variable overhead Allocated fixed overhead Cost per Unit $ 22 16 14 4 Required: 1. What is the relevant cost per unit to make the product internally? 2. What is the estimated increase or decrease in short-term operating profit of producing the product internally versus purchasing the product from a supplier? Complete this question by entering your answers in the tabs below. Show less Required 1 Required 2 What is the relevant cost per unit to make the product internally? Relevant Cost Per Unit Total relevant cost Make or Buy Terry Inc, manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an offer from a subcontractor to provide 2,200 units of product OP89 for $110,000. If Terry does not purchase these parts from the subcontractor, it must continue to produce them in-house with these costs: Direct materials Direct labor Variable overhead Allocated fixed overhead Cost per Unit $ 22 16 14 4 Required: 1. What is the relevant cost per unit to make the product internally? 2. What is the estimated increase or decrease in short-term operating profit of producing the product internally versus purchasing the product from a supplier? Complete this question by entering your answers in the tabs below. Show less Required 1 Required 2 What is the estimated increase or decrease in short-term operating profit of producing the product internally versus purchasing the product from a supplier? Increase Decrease