An outside supplier has offered to sell one of those components to Alanco. To evaluate this offer, the following information has been gathered relating to the cost of producing the component internally: $ Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable* Fixed manufacturing overhead, common but allocated Total cost 4.00 6.00 2.00 5.00 8.00 25.00 Supplier price $ 21.00 Units used per year 12,000 *Fixed manufacturing overhead, traceable is composed of two items: Depreciation of equipment (no resale value) Supervisor salary 30% 70% 1. Assuming the company has no alternative use for the facilities now being used to produce the component, complete the following analysis to determine if the outside supplier's offer should be accepted. Per Unit Differential Cost Make Buy 12,000 units Make Buy Cost of purchasing Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, common