Business, 11.12.2019 02:31 lizzyhearts

Gelb company currently manufactures 52,000 units per year of a key component for its manufacturing process. variable costs are $5.15 per unit, fixed costs related to making this component are $77,000 per year, and allocated fixed costs are $65,500 per year. the allocated fixed costs are unavoidable whether the company makes or buys this component. the company is considering buying this component from a supplier for $3.70 per unit.
required:
1. calculate the total incremental cost of making 52,000 and buying 52,000 units. should it continue to manufacture the component, or should it buy this component from the outside supplier?

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