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Paxton company can produce a component of its product that incurs the following costs per unit: direct materials, $9.90; direct labor, $13.90, variable overhead $2.90 and fixed overhead, $7.90. an outside supplier has offered to sell the product to paxton for $34.60. compute the net incremental cost or savings of buying the component.
a.$2.90 cost per unit.
b. $7.90 savings per unit.
c. $0 cost or savings per unit.
d. $7.90 cost per unit.
e. $2.90 savings per unit.
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