Tom's Toolery is operating at 70% of its productive capacity. It is currently paying $41 per unit for a part used in its manufacturing operation. Tom's estimates it could make the part internally for a total cost of $24 per unit, consisting of $18 of unit-level production costs and $6 of facility-level costs that are currently attributed to other products. Tomorrow usually purchases 50,000 units of the part each year. These units could be manufactured using Tom's excess capacity. what is the effect on cost if the company decides to start making the part?

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