+ Check my work Exercise 12-11 Make or Buy Decision (L012-3] Han Products manufactures 29,000 units of part 5-6 each year for use on its production line. At this level of activity, the cost per unit for part 5-6 is Book Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part $ 3.70 12.60 2.30 9.00 $ 27.80 ences An outside supplier has offered to sell 29,000 units of part 5-6 each year to Han Products for $23 per part If Han Products accepts this offer the facilities now being used to manufacture part 5-6 could be rented to another company at an annual rental of $79,000 However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part 5-6 would continue even if part 5-6 were purchased from the outside supplier Required: What is the financial advantage (disadvantage) of accepting the outside supplier's offer? Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution forma income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Department Total Hardware Linens $ 4,130,eee $ 3, 110, eee $ 1,e2e, eee 1,239,000 824, eee 415,000 2,891, eee 2,286, eee 6e5, eee 2,330,000 1,460,000 870,000 $ 561,000 $ 826,000 $ (265,000) A study indicates that $375,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 17% decrease in the sales of the Hardware Department Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department