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Bonita Company produces Optimist sailboats. The costs of producing 100000 tiller extensions for use in the boats are as follows: Direct labor $ 248000 Direct
Bonita Company produces Optimist sailboats. The costs of producing 100000 tiller extensions for use in the boats are as follows: Direct labor $ 248000 Direct materials 306000 Variable overhead 66000 Fixed overhead 182000 An outside supplier has offered to supply the tiller extensions for $ 723000. If Bonita accepts the offer $81000 of fixed costs can be avoided. What is the financial advantage (disadvantage) of accepting the supplier's offer? $ 22000 ($ 2000) $ 2000 ($ 22000)
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