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Troy Engines Ltd. manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its

Troy Engines Ltd. manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to produce and sell one type of carburetor to Troy Engines Ltd. for a cost of $107.0 per unit. To evaluate this offer, Troy Engines Ltd. has gathered the following information relating to its own cost of producing the carburetor internally:

Per Unit 42,000 Units per Year
Direct materials $ 23 $ 966,000
Direct labour 28 1,176,000
Variable manufacturing overhead 21 882,000
Fixed manufacturing overhead, traceable 33.0 * 1,386,000
Fixed manufacturing overhead, allocated 27 1,134,000
Total cost $ 132.0 $ 5,544,000
* One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value).

Required:
1-a.

Compute the total differential cost per unit for producing and buying the product. (Round your answers to 1 decimal places.)

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