Pharoah Manufacturing incurs unit costs of $$8\mathrm{.}00($$$5\mathrm{.}00$ variable and $$3\mathrm{.}00$ fixed$)$ in making a sub$-$assembly part for its finished

product. A supplier offers to make $16,800$ of the parts for $$5\mathrm{.}50$ per unit. If it accepts the offer, Pharoah will save all variable costs

and $$1\mathrm{.}00$ of fixed costs.

Prepare an analysis showing the total cost savings, if any, that Pharoah will realize by buying the part. $($Round per unit answersto $2$

decimal places, e$.$g$.15\mathrm{.}25.$ If an amount reducesthe 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

Number

of units:

$ $ $

$ $

The decision should be to $.$