The cost to produce Part A was $20 per unit in 2019. During 2020, it has increased to $22 per unit. In 2020, Pharoah Company has offered to supply Part A for $15 per unit. For the make-or-buy decision,

incremental costs are $2 per unit.

differential costs are $7 per unit.

net relevant costs are $2 per unit.

incremental revenues are $7 per unit.

Oriole Company is considering the following alternatives:

	Alternative A	Alternative B
Revenues	$38000	$54000
Variable costs	22800	22800
Fixed costs	10000	16000

What is the incremental profit?

$6000

$10000

$5200

$0