QUESTION $25$

Paxton Company can produce a component of its product that incurs the following costs per unit: direct materials, $$10\mathrm{.}90$; direct labor, $$14\mathrm{.}90,$ variable overhead $$3\mathrm{.}90$ and fixed overhead, $$8\mathrm{.}90.$ An outside supplier has offered to sell the product to Paxton for $$38\mathrm{.}60.$ Compute the net incremental cost or savings of buying the component.

$$0$ cost or savings per unit.

$$3\mathrm{.}90$ savings per unit.

$$8\mathrm{.}90$ savings per unit.

$$8\mathrm{.}90$ cost per unit.

$$3\mathrm{.}90$ cost per unit.