COTB MC Qu. 11-22 (Algo) Assume a company is considering buying... Assume a company is considering...

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COTB MC Qu. 11-22 (Algo) Assume a company is considering buying... 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 company's accounting system reports the following costs of making the part: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated Total cost 10,000 Units Per Unit per Year $ 18 $ 180,000 12 120,000 20,000 8 80,000 4 40,000 $ 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 2,100 more units of another product that earns a contribution margin per unit of $7.75. What is the financial advantage (disadvantage) of buying 10,000 units from the supplier? COTB MC Qu. 11-22 (Algo) Assume a company is considering buying... 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 company's accounting system reports the following costs of making the part: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated Total cost 10,000 Units Per Unit per Year $ 18 $ 180,000 12 120,000 20,000 8 80,000 4 40,000 $ 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 2,100 more units of another product that earns a contribution margin per unit of $7.75. What is the financial advantage (disadvantage) of buying 10,000 units from the supplier?