Make or Buy Terry Inc. manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an offer from a subcontractor to provide 2,800 units of product OP89 for $131,600. If Terry does not purchase these parts from the subcontractor, it must continue to produce them in-house with these costs:

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?

Direct materials Direct labor Variable overhead Allocated fixed overhead Cost per Unit $ 22 15 13 6 Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the relevant cost per unit to make the product internally? Relevant Cost Per Unit Variable overhead Direct labor Direct materials Total relevant cost $ 0 Required 1 Required 2 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? Decrease