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Oriole Manufacturing incurs unit costs of $7.40($5.40 variable and $2.00 heed) in making a sub-assembly...

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Accounting

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Oriole Manufacturing incurs unit costs of $7.40($5.40 variable and $2.00 heed) in making a sub-assembly part for its finished product. A supplier offers to make 10,600 of the parts for $5.80 per unit. If it accepts the offer, Oriole will save all variable costs and $1.00 of fixed costs. Prepare an analysis showing the total cost savings, if any, that Oriole will realize by buyingthe part (Round per unit answers to 2 decimal places, eg. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number, eg 15,000 or parenthesis, egs. {15,000)}

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