Question 12

1. Daily Kneads, Inc., is considering outsourcing one of its many products rather than making it internally. The supplier will charge $20,000 for 20,000 pounds of the product. The costs per pound to make this product include:

   	Cost per Pound
   Direct Labor	$0.30
   Direct Materials	$0.30
   Allocated Unavoidable Overhead	$0.70

   Calculate the incremental savings (or loss) per pound if the company outsources the product.

   If the company will lose money per pound by outsourcing, enter your answer with a negative sign "-" (not parentheses).