TB MC Qu$.10-76($Algo$)$ Paxton Company can produce a component of$...$

Paxton Company can produce a component of its product that incurs the following costs per unit: direct materials, $$9\mathrm{.}90$; direct labor, $$13\mathrm{.}90,$ and incremental overhead $$2\mathrm{.}90.$ An outside supplier has offered to sell the product to Paxton for $$34\mathrm{.}60.$ Compute the net incremental cost or savings of buying the component.

Multiple Choice

$$2\mathrm{.}90$ cost per unit.

$$7\mathrm{.}90$ savings per unit.

$$0$ cost or savings per unit.

$$7\mathrm{.}90$ cost per unit.

$$2\mathrm{.}90$ savings per unit.