14 Assume that a company manufactures numerous component parts, one of which is called Part A. The company's absorption costing system indicates that it costs $23.00 to make one unit of Part A as shown below. Direct materials Direct Labor Variable overhead Fixed overhead Total absorption cost per unit $10.00 6.00 2.00 5.00 $23.00 The company is trying to decide between two alternatives Alternativet Continue making 80,000 units of Part A per year using its existing equipment at the unit cost shown above. The equipment used to make this part does not wear out through use and it has no resale value Alternative 2. Replace the existing equipment with a new piece of equipment that the company would rent for $48.500 per year. The new piece of equipment would be used to make 30,000 units per year and it would reduce Part As direct labor cost per unit by 20% and its variable overhead per unit by 30%. The direct materials cost per unit will remain con constant What is the financial advantage or (disadvantage of renting the new piece of equipment? Multiple Choice $11.940) SOBOJ $3.9401 $14.500)