Novak Manufacturing incurs unit costs of $7.00 ($5.00 variable and $2.00 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 12,500 of the parts for $5.60 per unit. If it accepts the offer, Novak will save all variable costs and $1.00 of fixed costs. Prepare an analysis showing the total cost savings, if any, that Novak will realize by buying the part. (Round per unit answers to 2 decimal places, e.g. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).)

				Per Unit		Make		Buy		Net Income Increase (Decrease)
Number of units:		enter a number of units
select an item Fixed manufacturing costsTotal annual costPurchase priceCost of good soldManufacturing overheadVariable manufacturing costs				$enter a dollar amount rounded to 2 decimal places		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
select an item Variable manufacturing costsTotal annual costPurchase priceFixed manufacturing costsCost of good soldManufacturing overhead				enter a dollar amount rounded to 2 decimal places		enter a dollar amount		enter a dollar amount		enter a dollar amount
select an item Manufacturing overheadFixed manufacturing costsTotal annual costCost of good soldVariable manufacturing costsPurchase price				enter a dollar amount rounded to 2 decimal places		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a closing name for this statement Fixed manufacturing costsTotal annual costCost of good soldManufacturing overheadVariable manufacturing costsPurchase price						$enter a total amount		$enter a total amount		$enter a total amount

The decision should be to select an option buy the partmake the part