Wheeler Company can produce a product that incurs the following costs per unit: direct materials,$10; direct labor,$24,and overhead,$16.An outside supplier has offered to sell the product to Wheeler for $45.If Wheeler buys from the supplier,it will still incur 45% of its overhead cost.Compute the net incremental cost or savings of buying.
A)$4.00 savings per unit.
B)$4.00 cost per unit.
C)$2.20 cost per unit.
D)$3.80 cost per unit.
E)$2.20 savings per unit.

Question

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The Answer of Wheeler Company can produce a product that incurs the following costs per unit: direct materials,$10; direct labor,$24,and overhead,$16.An outside supplier has offered to sell the product to Wheeler for $45.If Wheeler buys from the supplier,it will still incur 45% of its overhead cost.Compute the net incremental cost or savings of buying.
A)$4.00 savings per unit.
B)$4.00 cost per unit.
C)$2.20 cost per unit.
D)$3.80 cost per unit.
E)$2.20 savings per unit.

Wheeler Company Can Produce a Product That Incurs the Following