Kando Company incurs a $12.00 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit.
Instead of manufacturing and selling this product, the company can purchase Product B for $5.00 per unit and sell it for $12.00 per unit.
If it does so, unit sales would remain unchanged and $5.00 of the $12.00 per unit costs assigned to Product A would be eliminated.
Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase Product B for resale?
(Round your answers to 2 decimal places.)