Marco Enterprises manufactures one of the components used to assemble its main company product. SpecialtyProducts, Inc., has offered to make the component at a cost of

$ 12.40 per unit. Marco Enterprises' current cost is $ 13.75 per unit of the component, based on the 130,000 components that Marco Enterprises currently produces.

Data Table Direct material per unit 4.00 Direct labor per unit 7.25 Variable manufacturing overhead per unit 1.25 1.25 Fixed manufacturing overhead per unit $ 13.75 Total manufacturing costs per unit Print Done Requirements 1. If Marco Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much? 2. What is the maximum price per unit Marco Enterprises would be willing to pay if it outsources the component? Print Done Requirement 1. If Marco Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much? (Enter a "O" for any zero balances. Use a minus sign or parentheses in the Difference column when the cost to make exceeds the cost to buy.) Incremental Analys is Make Outsource Component Outsourcing Decision Component Difference Variable costs Plus: Fixed costs Total cost of 130,000 components Less: Profit from another product Net cost