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Dipuisto-2312 Inc. manufactures radios at an annual production level of 50,000 units. At this production level, the cost per unit for a radio is as
Dipuisto-2312 Inc. manufactures radios at an annual production level of 50,000 units. At this production level, the cost per unit for a radio is as follows: Direct materials $3.00 Direct labor $5.00 Variable manufacturing overhead $8.00 Supervisor's salary $6.00 Other fixed manufacturing overhead $11.00 Total cost per radio $33.00 An outside supplier has offered to sell the radios to Dipuisto-2312 for $17 per unit. If Dipuisto-2312 accepts this offer, it can use the radio production space as a warehouse instead, replacing the warehouse it currently rents for $80,000. If the radios are purchased from the outside supplier, 100% of the supervisor's salary and 40% of the other fixed manufacturing overhead costs can be eliminated. What is the financial advantage of accepting the outside supplier's offer for Dipuisto-2312
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