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Exam Practice 2) Supler Corporation produces a part used in the manufacture of one of its products. The unit product costs $22. computed as follows:

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Exam Practice 2) Supler Corporation produces a part used in the manufacture of one of its products. The unit product costs $22. computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost An outside supplier has offered to provide the annual requirement of 7200 of the parts for S19 each. The company estimates that 80% of the 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 A) 52 per unit on average B) (51) per n on average C 53) per unit on v e D) Si per non average F11

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