E&J Engineering designs and manufactures solar energy generating equipment. The company produces a part for one of the system components. The unit product cost for the part is $19, computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost Multiple Choice An outside supplier has offered to provide the annual requirement of 6,600 of the parts for $15 each. The company estimates that 80% of its fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be: ($2) per unit on average ($4) per unit on average $7 5 2 $3 per unit on average 5 $ 19

E\&J Engineering designs and manufactures solar energy generating equipment. The compony produces a part for one of the system components. The unit product cost for the part is $19, computed as follows: An outside supplier has offered to provide the annual requirement of 6,600 of the parts for $15 each. The company estimates that 80% of its fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidabie cost in this decision. Based on these dota, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be: Multiple choice (\$2) per unit on average (\$4) per unit on average $3 per unit on average E\&J Engineering designs and manufactures solar energy generating equipment. The compony produces a part for one of the system components. The unit product cost for the part is $19, computed as follows: An outside supplier has offered to provide the annual requirement of 6,600 of the parts for $15 each. The company estimates that 80% of its fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidabie cost in this decision. Based on these dota, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be: Multiple choice (\$2) per unit on average (\$4) per unit on average $3 per unit on average