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Waterway Manufacturing incurs unit costs of $8.50 (\$5.50 variable and $3.00 fixed) in making a...

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Accounting

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Waterway Manufacturing incurs unit costs of $8.50 (\$5.50 variable and $3.00 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 17,500 of the parts for $6.00 per unit. If it accepts the offer, Waterway will save all variable costs and $1.00 of fixed costs. Prepare an analysis showing the total cost savings, if any, that Waterway will realize by buying the part. (Round per unit answers to 2 decimal places, 5 . 15.25, If an omount reduces the net income then enter with a negative sign preceding the number, eg- 15,000 or parenthesis eg (15,000)

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