Up Instruments uses ten units of Part Number W-91 each month in the production of scientific equipment. The cost of manufacturing one unit of W-91 is presented below.

Direct materials $5,000

Materials handling (10% of direct materials cost) 500

Direct manufacturing labor 8,000

Indirect manufacturing cost 9,000

Total manufacturing cost $22,500

Up's annual indirect manufacturing cost budget is one-fourth variable and three-fourths fixed. West Supply, one of Up's reliable vendors, has offered to supply Part Number W-91 at a unit price of $20,000.

If Up purchases the W-91 units from Duncan, the capacity Up used to manufacture these parts would be idle. Should Up decide to purchase the parts from West Supple, the unit cost of W-91 would: