Wheeler Company can produce a product that incurs the following costs per unit: direct materials, $10.50; direct labor, $24.50, and overhead, $16.50. An outside supplier has offered to sell the product to Wheeler for $47.60. If Wheeler buys from the supplier, it will still incur 40% of its overhead cost. Compute the net incremental cost or savings of buying.

a) $2.70 cost per unit.

b) $5.38 savings per unit.

c) $6.00 cost per unit.

d) $5.38 cost per unit.

e) $2.70 savings per unit.