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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

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 unt of Part A as shown belove Direct naterials Direct labor Variable overhead Fixed overhead Total absorption cost per unit The company is trying to decide between two alternatives $10.00 6.00 2.00 5.00 $23.00 Abernative 1 Continue makong 50.000 units of Part A annually using es existing equipment at the unt cost shown above. The equipment used to make this part does not wear out through use and has no sesale Alternative 2 Pechase 50,000 units of Part A from a supplier at a cost of $1700 per unt What is the financial advantage or disadvantage) of buying the parts from a supplier Maple Chock 5000000 $50,000 110,000 20000

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