Assume that a company makes 30,000 units of Part A each year. At this level of production, the companys accounting system reports the following cost per unit:

Direct materials	$ 16
Direct labor	10
Variable manufacturing overhead	4
Fixed manufacturing overhead	8
Total cost per unit	$ 38

An outside supplier has offered to sell the company 30,000 parts per year for a price of $33 per part. The company believes that $160,000 of the fixed manufacturing overhead cost being allocated to this part will continue to be incurred even if the part is purchased from the outside supplier. Furthermore, if the company accepts the suppliers offer, it will free-up 15,000 minutes of production time within a machining work station that is the companys constraining resource. The company could use all of these minutes to produce additional units of another product that requires 10 machining minutes per unit and that earns a contribution margin per unit of $16. What is the financial advantage (disadvantage) of buying the parts from the outside supplier?Multiple Choice

$34,000

$94,000

$(34,000)

$14,000