Transcribed Image Text: Goldberg Company currently manufactures 52,000 units per year of a key component for its manufacturing process. Variable costs are
$4.05 per unit, fixed costs related to making this component are $69,000 per year, and allocated fixed costs are $70,500 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.
Calculate the total incremental cost of making 52,000 units and buying 52,000 units. Should it continue to manufacture the
component, or should it buy this component from the outside supplier?
Complete this question by entering your answers in the tabs below.
Costs to Make
Costs to Buy
Calculate the total incremental cost of making 52,000 units. (Round “variable cost per unit” answers to 2 decimal places.)
Incremental Costs to Make
Variable cost per unit
Fixed manufacturing costs
Total incremental cost to make
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