1. Assume a company is considering buying 10,000 units of a component part rather than making them. A supplier has agreed to sell the company 10,000 units for a price of $40 per unit. The companys accounting system reports the following costs of making the part:

   	Per Unit					10,000 Units per Year
   Direct materials		$	18				$	180,000
   Direct labor			12					120,000
   Variable manufacturing overhead			2					20,000
   Fixed manufacturing overhead, traceable			8					80,000
   Fixed manufacturing overhead, allocated			4					40,000
   Total cost		$	44				$	440,000

   One-half of the traceable fixed manufacturing overhead relates to supervisory salaries and the remainder relates to depreciation of equipment with no salvage value. If the company chooses to buy this component part from a supplier, then the supervisor who oversees its production would be discharged. If the company begins buying the part from a supplier, it can use freed up capacity to produce and sell 2,150 more units of another product that earns a contribution margin per unit of $8.00. What is the financial advantage (disadvantage) of buying 10,000 units from the supplier?

   		$(32,150)
   		$(2,800)
   		$(22,800)
   		$(60,000)