Gilberto Company Currently Manufactures

Gilberto Company Currently Manufactures in $5 onlyGilberto Company

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Gilberto Company currently manufactures 60,000units per year of one of its crucial parts. Variable costs are $2.10 per unit, fixed costs related to making this part are $60,000 per year, and allocated fixed costs are $45,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.30 per unit guaranteed for a three-year period.

Calculate the total incremental cost of making 60,000 units. (Round cost per unit answers to 2 decimal places.)

Calculate the total incremental cost of buying 60,000 units.