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Davis Company currently buys a component part for $7.80 per unit. Davis estimates that making...

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Accounting

Davis Company currently buys a component part for $7.80 per unit. Davis estimates that making the part would require $6.30 per unit of direct materials and $3.80 per unit of direct labor. Davis normally applies overhead using a predetermined overhead rate of 125% of direct labor cost. Davis estimates incremental overhead of $3.30 per unit to make the part. The net incremental cost or savings of making the component is:

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