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16 marks QUESTION 3 Part A -(8 marks Roster Company makes 20,000 units per year of a part that it used in the products i

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16 marks QUESTION 3 Part A -(8 marks Roster Company makes 20,000 units per year of a part that it used in the products i Relevant Costs manufactures. The unit product cost of this part is compute das follows: Direct Material Direct Labour Variable Manufacturing Overhead Fixed Manufacturing Overhead Unit Product Cost $24.70 16.30 2.30 $56.70 An outside supplier has offered to sell the company a unit. If the be used to make more units of product that is in high demand. The additional contribubion all the parts that Foster needs for $51.80 com pany accepts this offer, the facilities now being used to make the part could margin on this other product would be $44,000 per year. If the part were purchased from the outside supplier, all the direct labour costs of the part would be avoided. However, $5.10 of the foxed manufacturing overhead cost that is being applied to the part would continue, even if the part were purchased from the outside supplier This fiked manufacturing overhead cost would be applied to the company's remaining products. Required What is the net total dollar advantage (disadvantage) of purchasing the part rather than making it

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