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Direct Materials Pitkin Company produces a part used in the manufacture of one of its products. The unit product cost of the part is

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Direct Materials Pitkin Company produces a part used in the manufacture of one of its products. The unit product cost of the part is $38.computed as follows Direct Labour Variable Manufacturing Overhead Foed Manufacturing Overhead Unt Product Cost 515 $8 $10 5301 An outside supplier has offered to provide the annual requirement of 10.000 of the parts for only $25 each. The company estimates that 30% of the fed manufacturing overhead costs above will connue the parts are purchased from the outside suppler Assume that direct labour is an avoidable cost in this decon Based on these data, what will be the per unst dollar advantage or disadvantage of purchasing the parts from the outside supplier? Muture Choce O $3 per un avantage 54 per unit diademage

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