The ABC Company had two options for sourcing molded plastic parts, and these options are presented in the table below. Now, the ABC Company has identified another potential supplier for the molded plastic parts. The new supplier has bid

$0.0500

per part but also will impose a shipping and handling charge of

$0.0200

per unit. Additional inventory handling charges should amount to

$0.0020

per unit. Finally, purchasing costs are estimated at

$20

per month for the length of the 36-month contract. Note that the forecasted demand is a total of 1 million units over the 36 months.

Insourcing option
Operating Expenses
Direct labor	$0.0700
Benefits (50%)	$0.0350
Direct material	$0.0300
Indirect labor	$0.0128
Benefits (50%)	$0.0064
Equipment depreciation	$0.0150	$15,000 absorbed over 1,000,000 units
Overhead	$0.0100
Engineering/design costs	$0.0400	$40,000 absorbed over 1,000,000 units
Total cost per unit	$0.2192
Outsourcing option
Purchase price	$0.1100
Shipping and handling	$0.0070
Inventory charges	$0.0030
Administrative costs	$0.0006
Total cost per unit	$0.1206
Savings per unit	$0.0986
Total savings (1 million units)	$ 98600

Part 4b. Suppose the three-year volume is expected to rise to 1.5 million, rather than 1 million, molded plastic parts.The total cost per unit associated with insourcing is now

(Enter your responses rounded to four decimal places.)