Problem 10-1A (Algo) Make or buy LO P1

Haver Company currently pays an outside supplier $37 per unit for a part for one of its products. Haver is considering two alternative methods of making the part. Method 1 for making the part would require direct materials of $16 per unit, direct labor of $19 per unit, and incremental overhead of $3 per unit. Method 2 for making the part would require direct materials of $16 per unit, direct labor of $13 per unit, and incremental overhead of $7 per unit. Required: 1. Compute the cost per unit for each alternative method of making the part. 2. Should Haver make or buy the part? If Haver makes the part, which production method should it use?