Question

1.) Paxton Company can produce a component of its product that incurs the following costs per unit: direct materials, $10.50; direct labor, $14.50, variable overhead $3.50 and fixed overhead, $8.50. An outside supplier has offered to sell the product to Paxton for $37.00. Compute the net incremental cost or savings of buying the component.

A. $3.50 cost per unit.
B. $8.50 savings per unit.
C. $0 cost or savings per unit.
D. $8.50 cost per unit.
E. $3.50 savings per unit.

Answer 1

It’s A because I had to do the math