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Haver Company currently produces component RX5 for its sole product. The current cost per unit...

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Accounting

Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 60,000 units of RX5 follows.

Direct materials $ 5.00
Direct labor 9.00
Overhead 10.00
Total costs per unit 24.00

Direct materials and direct labor are 100% variable. Overhead is 70% fixed. An outside supplier has offered to supply the 60,000 units of RX5 for $18.00 per unit.

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